The Crisis: Wilson's lame explanation (1975)

From the October 1975 issue of the Socialist Standard

On August 20th Harold Wilson made his long-awaited broadcast to the nation informing us of what his government proposed to do about the economic difficulties in which “our country” finds itself. It was an emotional appeal for us all to accept sacrifices, accompanied by the threat of what would happen if we did not. To be more specific, wage workers were told that they could no longer “get for themselves such a pay increase as to enable them to escape the rigours of inflation” and that “the limit on pay settlements is £6 a week”.

The whole harangue was preceded by what purported to be an explanation of the causes of our economic difficulties — an explanation which appeared to exonerate the government from all blame. No doubt, at the speed of the spoken word, the reasons given sounded plausible enough to most of those who listened.

Let us however examine more closely these “causes” which Wilson claimed to be known to us all. He gave three. First:

The whole industrial world faces the most virulent trade and employment depression since the thirties.

This is like saying that you are going to be out of work because there are not enough jobs to go round — and explains exactly nothing. It has, however, the built-in suggestion that trade depressions and unemployment are like cosmic disturbances, for which politicians cannot be held responsible. In fact later in his speech Wilson likened the situation to “the fact that the world has been knocked off its axis by a universal recession”. The second reason given was:

Industry’s failure over the past 20 years to invest in industry, new plant, machinery, factory buildings, industrial modernisation . . .

Presumably Wilson was referring to British industry : yet in West Germany where, due to war-time destruction of factories and plant, large investment and modernization were essential, there is more unemployment than in Britain. As a reason for our present difficulties this second cause seems suspect, to say the least — apart from the fact that every worker knows that more efficient production is aimed at reducing the labour force. And so we come to the third reason:

. . . the effect of inflation on industry’s ability to provide jobs for those established in industry, jobs for school-leavers . . . this year it has been almost entirely internal prices and costs, including pay, which have aggravated inflation . . .

Here the workers are intended to feel partly to blame for having “aggravated” inflation. But you cannot aggravate something which is not already there. So what causes inflation? We are not told.

So much for explanations which explain nothing. It is distressing that, as far as we can tell, such arguments can be accepted by the majority of the electorate. It is, however, understandable. Politicians have never informed the public of the true nature of the economic system which they try to administer. We do not learn about it at school or from the “mass media”. But at least we can take a hard look at what politicians such as Wilson tell us and see the worthlessness of their so-called explanations. It is then up to the workers to find their own explanations from an understanding of the nature of the capitalist economic system of production.

Let us then go back to Wilson’s three "causes”. Why in fact is there a trade depression in the “whole industrial world”? What is immediately apparent is that these countries have produced more commodities than they can sell at a profit. This is what “trade depression” means. But why should this be so? Capitalists, whether they control private companies or nationalized industries, employ the physical and mental abilities of wage-workers to produce commodities (or processed materials). The primary aim is to sell such commodities at a profit. This profit represents the difference between the value of the work provided by wage-workers and the wages they are paid. Employers know this only too well. The effort to restrain wage increases, the introduction of better machinery, the stream-lining of production methods, are all intended to reduce the “wage bill” and increase the margin of profit.

It follows therefore that the working class as a whole are not paid enough to buy back the goods they have produced. The “export drives” typical of all industrialized countries are evidence of this need to sell abroad the surplus which workers in the country of origin cannot afford to purchase. Likewise, in spite of what Wilson says, the bulk of profits are reinvested in industry — to produce more and more commodities in the hope that by price undercutting such goods can be sold abroad. But, like taking in each other’s washing, it is a futile endeavour when all countries are trying to do the same thing. The surplus car production at the present time is perhaps the most evident example of this. America, Europe and Japan are all fighting to sell their cars to each other — to the extent of “dumping” cars abroad at less than their internal prices.

It is true that, in part, export of commodities is required to provide the money to purchase food and raw materials not sufficiently available in the exporting country. But, globally, there is an excess of commodities, including food, over and above the purchasing power of the working class. This is what shows a world-wide trade depression to have other causes than interference from outer space. It is due to, in Marx’s phrase, “disproportion of production” which is inherent in capitalism.

That is not the end of the story. The “crisis of over-production” leads to a slowing down, or even halting, of production. Capitalists will not for long continue production of what they cannot sell, even at a reduced margin of profit. Reduction of production means unemployment. The ability of workers to buy back what they have produced is further curtailed. Production is reduced still further and unemployment increases.

This is the explanation of the nature of “the virulent trade and employment depression” which Wilson might have given. But then, having promised to administer capitalism better than Heath, he can hardly be expected to tell the electorate that trade depressions are endemic in the capitalist system. The electorate might want to change the system for one which produces commodities for distribution rather than sale at a profit.

What is really behind Mr. Wilson’s second “reason” for our economic difficulties: British industrial inefficiency? The explanation is to be found in what has been written above. British capitalism can only survive if it can export wealth. To do this, foreign competitors must be under-cut, or better value for money offered. By the more efficient processes outlined by Wilson in his speech industrial wage bills can be reduced, goods can be exported at lower prices while still maintaining the previous margin of profit. Some countries can, however, compete more successfully because labour is cheaper, and this is why “wage restraint” is so important to the employer. This leads on to the third of Wilson’s “reasons” in his reference to pay aggravating inflation. Industry’s concern about pay increases is not that they aggravate inflation but because they make it more difficult to sell products at a competitive price while still maintaining the customary margin of profit.

But this still does not explain the inflation which is “aggravated” and which largely caused, in the first place, the demands for higher wages. This kind of inflation — the devaluation of the pound — has been caused by the excessive printing of paper money by the Bank of England on the authority of successive governments since the war. No mention of this was made in Mr. Wilson’s speech. But he is not the only one to keep quiet about the effects of government monetary policy, both here and abroad, on the rate of inflation. In November 1974 Enoch Powell was complaining that:

. . . little attention had been given (in the press) to the epoch-making conclusions of the European Economic Community Countries’ finance ministers on measures to tackle inflation. To restore the general stability in the value of money they agreed that they should follow the principle ‘that increases in the supply of money should be cut back to the same level as the real growth in gross national product’, plus whatever might be accepted for the time being as the permissible rate of inflation, namely 4 per cent next year.

(The Times, 4th November 1974)

Our economic difficulties are not, as Wilson implies, a “bolt from the blue” but a direct result of the operation of a capitalist economy. When the electorate understands this it may seriously examine the case for establishing an alternative economic system based on production for use rather than production for sale, that is, Socialism as we mean it and not as Labour politicians use the word to conceal state capitalism.

John Moore

The story behind Powell Duffryn (1965)

From the October 1965 issue of the Socialist Standard

In Regent Street, in the posh shopping area of London, is a shop called POWELL DUFFRYN. Now that nationalisation is once again a political issue it is not out of place to tell the story behind this name.

It begins in South Wales, where Powell Duffryn used to be one of the hated coal combines owning pits in the Red Rhondda valleys. Between the wars these coal combines, by their persistent attempts to worsen wages and working conditions and by their union-busting, aroused deep resentment among miners, many of whom devoted their time to campaigning for the nationalisation of the mines. And on January 1st, 1947 their aim was achieved. The mines were handed over to the National Coal Board; the NCB flag was raised amidst cheering and the singing of traditional Labour songs. Powell Duffryn was dead. Or was it?

As a side-line to mining, Powell Duffryn was also engaged in the making of heating equipment, boilers and radiators. This side of the business was not nationalised. In the years that followed, while the NCB languished, Powell Duffryn used its compensation and flourished. Today it has its shop in Regent Street; it co-operates closely with the nationalised fuel industries—the Gas Board and the NCB. Not long ago the papers carried a joint Powell Duffryn-NCB advert. All of this is a mockery of the devoted, if misguided, struggles of the miners to nationalise such outfits, and yet another monument to the futility of reformism.

It is worth spending some time looking into the concept of nationalisation a little more closely. In its modern sense, the term first appeared in 1869 when the telegraph system was nationalised, though for some time before the concept had gone under a different name. Some people had called for the nationalisation of land, and a clause in the 1844 Railway Act had allowed for the nationalisation of the railway system if necessary. The word itself—nationalisation—gives a clue as to its significance. The dominant theories, popular and philosophical, of capitalism hold that the interests of all those who make up the entity variously called the “nation” or the “public”, on the popular level, and “society” or “the community”, in the textbooks of political philosophy, are one and the same.

This is a fraud. Present-day society is composed of two mutually antagonistic classes, between which there is a conflict over the distribution of the product of labour. The interests of these two classes are completely opposed; they have no interests in common. Once this is realised, it can be understood that “nation” and “public” are often little more than polite words for the owning class.

When the apologists of capitalism wish to refer to the situation which exists after the State has taken over a section of industry in the interests of the capitalist class as a whole, they sometimes call it “common ownership”. This is how the phrase is used in the famous Clause IV of the Labour Party constitution in its reference to the “common ownership . . . of the means of exchange” (i.e. financial institutions). To talk of the common ownership of financial institutions is a contradiction in terms, the purest nonsense. But to those who use “common ownership” in its capitalist sense it makes sense. As has been well said, the Labour Party stands for “socialism for the capitalist class”!

The capitalist class has been prepared to consider nationalisation as a solution when their interests as a whole have differed from those of a section. This was the position with land in the nineteenth century. The landowners, by virtue of their monopoly position, were able to extract a portion of the proceeds of working class exploitation from the capitalist class. A similar fear that the railway companies might exploit their monopoly position was responsible for the clause in the 1844 Act. In both cases nationalisation, or the assumption of ownership by the State on behalf of the rest of the ruling class, was considered. This had one drawback; it meant that the State had to assume the management of the estates or railways it might acquire.

Most capitalists were not prepared to put such power into the hands of their State officials. The institution of the public corporation was a solution to this problem. It removed the fear of the State becoming more and more powerful and eventually taking over other sections of industry as well. This fear was not groundless; there are historical examples of this happening, in Russia for instance. Here the capitalist class as well as the working class, such as they were, were subjected to a dictatorship of the State. The system remained capitalism however and it eventually evolved into a form of State capitalism.

Where such disputes break out between the capitalist class and usurping politicians or State officials, the workers are invited to take sides. But their interests are no more involved here than they were in the old landowner-capitalist struggle. Despite this, “Leftwingers” delight in backing the new usurpers against the capitalists; only to find that the usurpers end by establishing themselves as a new ruling class. So nationalisation without compensation is no more worthy of working class support that the more moderate means of nationalisation that have been applied in Britain.

With the public corporation the capitalist class felt less fear about nationalisation, so that in 1944 Herbert Morrison could declare that the Conservatives had introduced more “Socialism” than the Labour Party. The nationalisations of the post-war Labour Government however identified the Labour Party as the party of nationalisation.

Soon after 1945, a large section of the capitalist class were becoming dissatisfied with the efforts of the Labour Party on their behalf. They were becoming annoyed at having to pay taxes to prop up inefficient State-run industries. Not that they were completely opposed to all measures of State control; they just came round to the view that nationalisation was not a suitable means of such control. This is the crux of the argument about steel nationalisation.

The Iron and Steel industry has been subject to a substantial amount of State control since the 1930’s. In 1951 it was nationalised but in the succeeding years the Conservative governments sold most of it back to the former owners. Ironically they could find no-one to buy Richard Thomas and Baldwin’s which is still nationalised today. The plans recently announced by the Labour government provided for the sole shareholder of some 90 per cent of the industry to be a National Steel Corporation which can thus control the industry as it wants. The Conservatives and Liberals favour what they call a more competitive solution.

The compensation measures—since in Britain nationalisation amounts to a business deal in which the State buys out the old owners—have been described in avowedly capitalist papers as reasonable, fair and far better than expected. One referred to “jubilation in the City”. It seems that some £660 million will have to be paid out. In present at stock-market conditions much of the government stock which will be given as compensation could well be sold and the capital re-invested in more profitable fields.

This brings us back to Powell Duffryn. The same story will no doubt be repeated for the steel industry as for the coal industry and the others. We conclude by quoting from a recent survey of the State in industry in Britain:

“Nationalisation deprived many companies of their assets but left them with huge sums in cash and stock for re-investment after compensating the former shareholders, The colliery companies alone received nearly £300 million from this source. Some companies became investment trusts; others took over and developed existing businesses or established new enterprises in fields where they could use their technical and managerial skill. Typical examples are Cable and Wireless (Holdings) Ltd.—now quite unconnected with the nationalised concern, Cable and Wireless Ltd.—which has invested its free money to build an interest in about 850 different companies; and Thomas Tilling (Holdings) which continues to manage the interests of the old Tilling Group that were not acquired by the British Transport Commission, and has used its compensation to acquire holdings in some twenty-five companies in industries ranging from light engineering to glass and plastics and from insurance to book publishing” (Government and Industry in Britain, 1962, J. W. Grove, p. 250).

Adam Buick

Inflation and prices - Part 4 (1965)

From the October 1965 issue of the Socialist Standard

Link to Part 3.

In this last instalment it may be useful to make a few brief comments on the subject which we have been discussing.

A great many people think that higher prices are caused by higher wages; they look at what has been happening in the last 20 or 25 years and they think this proves their point. One fact is enough to dispel this belief. Between 1945 and 1951 the retail price index was more or less continually rising faster than wage rates, it was not a question of wages going up and prices following, but the reverse. Secondly, it has to be remembered that in a period of continuing inflation, when manufacturers can more or less confidently expect that there will be a steady rise of prices of, say, five per cent a year because of inflation, they would often prefer to give a wage increase when it is demanded than to risk a strike. And, of course, they never fail to represent the price rise which would take place anyway as having been due to the wage increase. They will often time their price increases to follow a wage increase to give this impression, although if market conditions are against them, they cannot put up their prices whether they want to or not and whether wages have gone up or not.

At the present time the Government in Great Britain talks in terms of having no more inflation, even if this might mean fighting the trade unions over wage claims and risking big strikes. It remains to be seen whether they will. While relatively full employment lasts, the trade unions are in a fairly strong position, rather different from the situation between the wars when there was always at least a million unemployed.

Governments do not always prefer inflation. In certain countries they carry out the reverse—a deflationary movement—as the British Government did after the First World War. On that occasion prices went down by about one-third, and wages came down with them. Russia since the Second World War has twice up-valued the rouble, replacing the old currency by a new and much reduced quantity of notes. France did the same in 1960. One of the reasons why in Great Britain the Government is unlikely to try to reduce prices to anything like their former level is that its obligation to pay hundreds of millions of pounds on the National Debt would become an enormously increased real burden, if they had to pay it in currency, the purchasing power of which was being increased by the deflationary fall of prices.

During the last 25 years the holders of Government securities have found that the real value of their holdings and the purchasing power of the interest they received on them are steadily being reduced by the falling value of the pound. This has suited the interests of the general body of capitalists in Great Britain.

When Russia in 1947 up-valued their rouble they got over that particular difficulty by simultaneously reducing the amount of bond holdings. A Russian, for example, who had Government bonds to the value of 1,000 roubles, found when the up-valuing of the rouble took place, that his holding of Government bonds was cut by one-third or one-half.

No city editor or orthodox economist accepts the Marxian view that the increase of a non-convertible note issue is a cause of inflation. Some of them, including some of the followers of the late Maynard Keynes, deny that the note issue has been excessive, and say that it has merely kept pace with the currency needs required by expanding trade. It is, however, for them to explain why it was necessary to multiply the note issue in Great Britain by nearly five times in face of the fact that the actual physical volume of production in Great Britain is now not more than about five per cent above the pre-war level. Obviously, these two facts do not square with the interpretation put on the note issue. It is a reasonable assumption that the excess issue has only been made necessary by the multiplied price level, which has itself been largely caused by the note issue. Another group of economists deny that the note issue matters any more, one way or the other. It is for them to explain why the Government troubled to multiply the note issue if it is not of sufficient importance to have any effect.

Edgar Hardcastle

(Concluded)

Foreign trade and the workers (1948)

From the September 1948 issue of the Socialist Standard

On every conceivable occasion the Labour Government has urged the workers to work harder to wipe out the gap between imports and exports. “When this gap has been closed,” says the Government, “Britain will again be prosperous; there will be plenty to buy in the shops, and the workers will no longer suffer the shortages and restrictions of the present day.”

A glance at history is sufficient to show the fallacy of these claims as far as better working-class conditions are concerned.

The closing years of the nineteenth century and the early years of the twentieth found British capitalism enjoying unparallelled prosperity. Exports, profits on shipping, and returns on foreign investments more than balanced the value of imports. Looked upon as “the workshop of the world” Britain had rich and plentiful rewards for those who invested in her industries. An idea of the wealth being acquired by the British capitalists at that time can be gained by a glance at the estates upon which death duties were levied in 1903. According to the “Daily Mail Year Book” for 1904 (page 270) five millionaires left estates totalling nearly eight million pounds, whilst two hundred and nineteen further members of the comparatively small capitalist class left a total of nearly forty-nine million pounds.

Yes! England was certainly a, rich country at that time—yet, for the workers, where was the freedom from shortage which, according to the Labour Government, comes with this national prosperity?

Let us refer to a writer of the time, Mrs. Bernard Bosanquet. Imbued with immense but ill-founded optimism, Mrs. Bosanquet and other philanthropists mistakenly imagined that help from the rich could reduce the poverty of the workers. Yet, so bad were working-class conditions, that even Mrs. Bosanquet’s great optimism became depleted and we find her writing in her hook, “Rich and Poor” (published 1896) : —

“Of other charities it would take too long to speak. The parish is beset with them at certain seasons of the year; and money is flung in amongst us much as nuts are flung to boys to scramble for. Soup-kitchens, philanthropic societies, country holiday funds, ragged school funds, funds from all the enterprising newspapers, and funds from all the political clubs in the district; church funds and chapel funds, missions and mothers’ meetings, all are engaged in pouring money into a slough of poverty which swallows it up and leaves no trace of improvement.” (Page 37.) (Our italics.)

Let us revert to the “Daily Mail Year Book” for 1904. On page 141 we find that the number of people seeking poor relief in the year 1900 was 1,882,000, and when referring to the unemployed in 1903 Mrs. Bosanquet said :

“They seem to increase year by year, and the next trade depression will probably show them in formidable numbers.” (Page 9.)

Page 246 tells us that a Professor Vort gave the minimum cost of the diet required by an average working man, his wife and three children as twelve shillings to thirteen shillings and sixpence per week. This diet was so stringent that it did not allow for tea or cocoa—only water. Looking then at the wages of agricultural workers (same page) we are informed that in England the average weekly pay was 17s. 1d., whilst in Wales and Scotland the averages were 16s. 5d. and 18s. 2d. respectively.

Eighteen shillings per week in wages when the weekly cost of the barest food necessities for a man, wife and three children was round about thirteen shillings. Five shillings left over for the provision of rent, clothing, insurances, etc. ! And what of those married workers who had more than three children to support?

The “Twelfth Abstract of Labour Statistics,” issued forty years ago by the Board of Trade, gives us further information. It states that “on every day throughout the year 1892 the average number of persons in receipt of poor relief was 953,719, this number rising steadily each year with but very slight fluctuation to 1,103,724 in 1906, being an increase not only in the number, but also relatively to the increase of population.”

Such was the prosperity of many workers during the Golden Age of British Capitalism when the export trade was said to be in a highly flourishing condition.

Experience shows that whilst the capitalist class is endeavouring to sate the world’s markets it will keep wages as low as possible, for only by doing this can commodities be produced at a price that will allow the undercutting of rival competitors.

On the other hand, as soon as the markets are filled and commodities can no longer be sold profitably, production is curtailed and large numbers of workers are thrown out of work. The capitalist class does not employ workers out of benevolence, but for the express purpose of amassing profits from products that will sell. When commodities cannot be sold it is useless, as far as the capitalist class is concerned, to retain workers in commodity production.

Thus it is seen that whether trade is balanced, or whether there is a gap between imports and exports, the lot of the workers, as a class, remains much the same.

Only Socialism will end commodity production with its wage-cutting;, “sweating,” unemployment, and wars over markets, etc. Only Socialism, wherein the means of production and distribution will be commonly owned, will bring production for use and not for sale. Only within Socialism will production bring plenty to every man, woman and child.

F. W. Hawkins

Let’s have common ownership, not Common Market (1971)

From the September 1971 issue of the Socialist Standard

A pathetic spectacle provided by the reformist parties and their satellites as they work themselves into a lather over the issues thrown up by capitalism. They fall for it every time. Whether it be the balance of payments, export-chasing, or gold reserves, at the drop of a hat they form up into positions and start to do battle for the capitalist class, whose interests alone are involved.

Capitalism has always provided plenty of distractions to take working class attention away from the real issue, and every time the self-styled leaders of the workers have proclaimed them as vital issues that will lastingly effect the future course of history.

The Common Market is just another distraction. The arguments for and against joining are equally irrelevant. One thing is certain, that the real issue has not been and is not being debated by the pundits of the “left” and “right”.

Capitalism often produces strange bedfellows, but when the mutual commitment to capitalism of both “left” and “right” wing groups is understood, it is not surprising to find the so-called Communist Party and National Front in the same camp, and the Trotskyists trailing along as usual behind the Tribune set, with Enoch Powell thrown in for good measure. The Labour Party front bench, which maintained a precarious unity while in power, have gone their different ways. Wilson complains loudly about “knives” and “hatchets”, but is not listened to by Roy Jenkins, Michael Stewart or Lord George Brown. The petty demagogues line up in a power struggle inside the Labour Party, as Michael Foot seeks to purge pro-market members from the shadow cabinet.

The two sides bicker incessantly about the “terms”, about New Zealand, and the possibility of better pickings for British capitalism elsewhere. None of these things is of the least concern to the working class. And, by working class, we do not mean the wage-slaves of just Britain and Europe, but of the entire world. What then is the real issue?

Throughout the world the means of production are concentrated in the hands of an owning minority — the capitalist class. This means that the vast majority own nothing but their physical and mental abilities to work. They must sell these abilities for wages or salaries in order to live. This vast non-owning majority is the working class. There is an antagonism of interests between the capitalist class owners and the working class non-owners since the fundamental relationship of capitalism, that of employer to employee, rests upon exploitation. The interest of the capitalist class is to maximise their profits and accumulate capital through the exploitation of wage-labour. To serve this interest, the whole world has been turned into a market for the profitable disposal of commodities (or wealth produced by wage-labour under conditions of private property and exploitation). The entire globe is the hunting ground for minerals and other resources to feed the hungry machines of industry, to keep up the flood of commodities and expand profits. The rivalry between national and international capitalists promotes their military power and fashions their alliances. War, like poverty, unemployment, slums and hunger, is inseparable from capitalism.

Both the pro- and anti-marketeers work on the same false assumptions, namely, that the market economy is indispensable, and, that there, is a unified national or European interest which workers and capitalists have in common. Socialists totally reject these assumptions. The interest of the working class is to end the system that exploits them; to abolish the employer-to-employee relationship; to do away with commodity production and get rid of the markets profits mad-house. This will mean the abolition of the wages-system and of buying and selling. In short, the interest of the working class, is to get rid of capitalism. The real issue is one of ownership. The workers in the six countries which at present belong to the EEC own none of the vast industrial or other resources of those countries. They are wage-slaves, just like the workers in Britain.

The only market that awaits British workers, like their European fellow-workers, is the labour-market, and the dictum “hired when it pays, fired when it doesn’t” will remain in force.

Instead of accepting the bogus arguments being trotted out by both sides, for and against joining, workers should be asking questions like: In or out of the Common Market, will wealth continue to accumulate in the hands of a few and will food still be destroyed while people starve? In or out of the Common Market, will poverty and insecurity continue to blight the lives of many millions ,both here in Britain and throughout the world? In or out of the Common Market, will H-Bombs remain both within Europe and outside to threaten the existence of mankind? In or out of the Common Market, will the massive power blocs, America, Russia, China, Japan and Europe, continue to struggle for advantage with war as their last desperate card?

These are questions which put the Common Market in its real capitalist perspective.

There are those who oppose entry because they fear loss of national identity. The workers have always been taught to be proud of their master’s country. If the barriers of nationalism are weakened through the EEC, this would not be a harmful effect, though there is little sign of it happening. All that is taking place is a grouping together of States, which has happened before, in earlier stages of capitalism, in America, Germany and Italy except that the EEC has yet to go for full political union.

Modern capitalism operates with such massive plant and investment levels that grouping together is the only way to stay in the big league. The military strategy of modern capitalism, and the costly technology of modern warfare, also dictate the coming together of groups of nations. If nationalism on the old scale diminishes, a continental scale of nationalism will develop as the rivalry between the emerging groups grows hotter.

What is really relevant to the world context in which we live today, is not new groupings, but a society without frontiers. Not bigger markets and fatter profits, but an end to all markets and all profits. Not the concentration of ever greater wealth into fewer hands, but the common ownership of the Earth and all its resources. This is the real issue which faces the workers of the world.

Harry Baldwin

Common Market: The great debate — where we stand (1971)

From the September 1971 issue of the Socialist Standard

Anyone who has recently been able to spare time from the test matches, television, pop music and so on may be aware that there is a new, rival attraction in the entertainment field. It is called the Great Debate on the Common Market, which makes it sound as if we have all been joining in, in every pub and bus queue and factory floor. At times, indeed, it has gone beyond mere entertainment, what with Harold Wilson walking about with a small forest of knives sticking out of his back and the Labour Party taking such fright at the public spectacle of its leader opposing something which his government tried to pull off, and then spending so much time in pious justification of his two contradictory attitudes, that they have suddenly started a Don’t Let’s Be Beastly to Harold campaign.

In fact, as Wilson (who has been known at times to tell the truth) says, there is a wide split of opinion on whether this country should join the Common Market. Both the big parties are split although the Tories, perhaps not yet completely recovered from their stunned delirium at the victory of June 1970, have been largely successful in stifling their dissenters. The public outside the parties are divided; soon, perhaps, marriages will be ruined and brother fall out with brother, swearing never to speak to each other again. And all because of the Great Debate on the Common Market.

One problem which the politicians have is in stimulating interest in something which has been an issue for about ten years. And such are the intricacies of capitalism’s trade — its agricultural support policies, its commodities agreements, its financial jugglings, that only an addict must now be able to stay awake when the thing is being discussed while the rest of us drop off in front of the telly set.

On the one hand the government case for going into Europe, while admitting that some food prices are going to rise (which, Common Market or no Common Market, is a pretty safe bet anyway) is that this is a tremendous opportunity for unheard of prosperity for us all. The official Factsheets on Britain and Europe talk about British industry having access to a market of more than 250 million people, of firms being able to plan their operations more adequately, of the “major benefits” resulting from the removal of tariffs between Britain and Europe.

It does not need a cynic to perceive a certain familiarity in those promises of a golden future. We can all remember similar prospects, held out over similar schemes of international unity or even international separatism, or some equally irrelevant proposal. The opponents of British entry seem to think that the golden future is here already. They argue that membership of the Six will mean abandoning, or weakening, the trading tie-ups with the Commonwealth, with no compensatory advantages. They mutter about upsetting the balance of payments, of losing that comforting trading surplus, which apparently stands between us and some unimaginable calamity. Some opposition may even be based upon xenophobic fears about the free movement of labour — about virile Frenchmen and Italians flooding over to steal all the best jobs and the most desirable women.

Now the Socialist Standard has always made it clear that such matters as the balance of trade, the exports of one capitalist state as against another, the exploitation of markets, are of interest to us only in as much as they illuminate the hopeless anarchies and inadequacies of capitalism. It is for this reason that we do not take a stand of opposing or supporting the efforts of the British capitalist class to get into Europe. This is not a matter of refusing to have any opinion or of imitating the feat of Wilson (and of Gaitskell before him) of sitting on the fence. In fact on this issue, as on all others, we have our own side. We are there, alone, but unlike the rest we know why.

At this point it is necessary to return to basics, however tiresome this may be to anyone who hungers for the excitement of the Great Debate. The first basic is that this is capitalism — if it were not, there would be no such thing as the Common Market. The attempt to join Europe, and the arguments about it, are all based upon the acceptance of capitalism, its needs and its priorities. We are invited to believe that these needs are of concern to workers, that the failure or success of the British application will make enough difference to our lives to be worth taking sides over. But the least which is needed to support this argument is evidence that the countries which are in the EEC are significantly different from those which are not in it.

So here is another basic. Capitalism divides its people into two classes — capitalist and worker, employer and employee, owner and non-owner, whichever term we choose to apply. These two classes are engaged in a struggle over the ownership of the means of wealth production. This struggle takes the form of disputes over wages, which are the only method open to the working class of obtaining wealth, either as the basic necessities like food or the lesser needs such as holidays and so on.

What this means is that a permanent feature of capitalism is (need we say this, in 1971?) the industrial struggle. Sometimes a strike; sometimes a go-slow; sometimes a lock-out. But always a struggle, never ceasing because it is inherent within capitalism. It is not unfair to insist that, if all the hopes and promises about the prosperity of the Common Market were real, its record of strikes and other industrial disputes would be markedly different. Of course it is only necessary to state this to illuminate the absurdity of the idea; France in May 1968, for example, is too recent a memory. Since then there has been a more “normal” pattern of industrial struggle, of transport strikes paralysing Paris, of a one-day general strike throughout Italy and so on. But the point is made. The class division of capitalism is as evident, as divisive and as disruptive in Europe as elsewhere.

We have already said that the Common Market could exist only within capitalism. This is so, first, because capitalism is a market system; its wealth is produced for the market, for sale as distinct from for human need. Now this might be all very well except for the fact that there is no way of adjusting production and the market so that they meet each other’s demands. Capitalism goes to great lengths to find a way of doing this; we are swamped with economic experts and market forecasters and all sorts of other very clever men and most of them are confident, at some time or other, that they have solved the problem and are about to bring everlasting profitability to capitalist industry and trade.

But of course if they ever succeed in this we would never hear dread words like bankruptcy, redundancy, slump. There would never be spectacular collapses like Rolls Royce and Upper Clyde; there would never be unemployment and capitalism would sail along like a great clipper ship under full sail on a calm sea. What actually happens is that it is more like a coracle in the Bay of Biscay in a Force Nine gale. Even the politicians know this; did not the MacDonald government in the thirties blame their troubles onto an economic blizzard; did not Wilson’s lot moan that they had been “blown off course”?

Apply this yardstick again, how does the EEC measure up? Is all well economically across the Channel? All calm and under control? In truth, day by day the reports come in showing that the Market economy is as wild and uncontrollable as anywhere else. On July 27, for example, the West German Economics and Finance Ministry was worried that the “tensions” in the German economy were showing no signs of lessening, with industrial producer prices still rising. The next day the Paris Chamber of Commerce reported a slow-down in industrial production, with what they claimed as the annual growth rate at 4.5 per cent as against the 6 per cent prevailing since last autumn. On July 30 the French Minister of Finance was admitting that the rate of inflation for the first half of 1971 was “not satisfactory”; prices had risen at twice the rate hoped for by the government and a wave of strikes is expected after the summer holidays.

It may be argued that these are trivialities, were it not that they are symptomatic of the basic chaos of capitalism, all over the world. Another current problem of the capitalists of the Six is their “voluntary” limitation of steel exports to America. At present the annual growth of these exports is limited to 5 per cent; the Americans are reported to want to reduce this to 2.5 or 3 per cent, while the European steelmen are anxious that Japanese steel, limited already in its access to the American market, may seriously compete in Europe. Negotiations are, naturally, going on but it does not need a fortune teller to know that they will be a typically futile exercise, with no basic effect on the system nor on the interests of its people.

These are examples of the anarchy of capitalists. As far as Europe is concerned, the anarchy is such that even the “experts” are not united in their forecasts on the British application, nor even on what is happening in Europe at the present. A study published last December by the National Institute of Economic and Social Research (described by The Guardian as “the main independent economic forecasting and analytical group in Britain”) contradicted many of the opinions and forecasts from the other “experts”. Compare these views, from the government’s Factsheets and the Institute’s report as it appeared in The Guardian (1 December 1970).:

“Factsheets: One of the striking facts about the Common Market is its rate of growth.

NIESR: The economic growth of the Six has slowed down since the EEC was formed while that of the industrialised countries outside has speeded up.

Factsheets: . . . the main industrial advantage to us would be direct access … to a market of more than 250 million people.

NIESR: So far as the larger market offers advantages, Britain is already getting these from the outside.

Factsheets: The fact that our share of the Community’s total imports of manufacturers is still only about 7 per cent indicates the potential for growth in exports to Europe.

NIESR: Britain’s competitive position inside the Community might suffer as a result of cost increases imposed by Community policies …”

It would be possible to fill up several issues of the Socialist Standard with this kind of analysis of the Common Market. When we have cleared away all the rubbish of politicians’ speeches and the contradictory ramblings of assorted economists we are left with some basic facts. The EEC is no more than yet another instalment in the theory of the larger market which assumes, with absolutely no justification, that the problems inherent in a small market disappear, or can be more easily tamed, in a large market. What, if anything, actually happens is that the problems may well get larger with the market and as the intensity of wage-labour exploitation increases.

The problems are not, and cannot be, solved because the market is itself basically uncontrollable. If it were any other way, capitalism would be a much saner and more peaceable society than it is. Through all the Great Debate on the Common Market none of this is being argued; the debate is pre-occupied with other, quite irrelevant, matters such as commodity agreements and budget contributions. And the working class, who are always being misled into taking their masters’ sides in the disputes of capitalism, are now persuaded once again that their interests are what is at stake in the Great Debate and that it is all happening so that their lives can be improved.

The facts show otherwise. Working class lives can be improved by the simple process of getting rid of the social system which divides people into worker and capitalist and which sets up the conflicting interests and the anarchy of the market economy. That is what socialists want, what we work and struggle for. We are not detached from the Great Debate; we are deeply involved in it because we see in it more evidence of the futility and impotence of capitalism and of the urgent need to replace it with a society of common ownership.

Ivan

Does the Navy safeguard our daily bread? (1936)

From the July 1936 issue of the Socialist Standard 

Two opinions about the Navy have been jostling for front place in the past six months. One is that the Navy is rotten: just a lot of old tin-cans waiting for an enterprising dictator to sink them. The dictator, the ex-Labour leader Mussolini, is supposed to have bawled the British fleet off the Western Mediterranean into an Eastern funk-hole, and to have assumed the mastery of the sea. The other opinion is that the fleet retired voluntarily, too proud to fight, or according to some crooked hidden plan of those who decide the foreign policy of the British capitalists.

Which of these is the truth we do not know. Probably the supermen who are in control do not know. Probably the naval experts who advise them, like the professional economists, are all at sixes and sevens, and able to provide every variety of contradictory opinion on demand. As for the theory of a cunning piece of double-dealing, perhaps it is true, as alleged by Continentals who have studied British diplomatic and Governmental methods, that the reputation for cunning enjoyed abroad by the British ruling class is due to pure mischance. The benighted foreigners watch the elephantine blunderings of the British Cabinet and conclude that it must be an elaborate smoke-screen hiding deep-laid plans and plots, simply because it is unbelievable that Baldwin and Co. can really be as silly as they seem.

However, these are realms into which it is profitless for us to go. Instead, let us try to answer another question about the Navy.

What the Navy does for the British Workers

What the Navy does for the British investors who have some £3,000 million invested abroad we know, but what do the workers get out of their masters' expensive little toy? Mr. Kenneth Lindsay, M.P., one of Mr. MacDonald’s ex-Labour Party group, has answered the question. Mr. Lindsay is Civil Lord of the Admiralty and presumably knows all about fighting ships. Speaking in the House of Commons on May 28th, 1936, he told the M.P.s that he identified himself with Mr. Winston Churchill’s statement, “the purpose of the Navy is to ensure the arrival of our daily bread.” He went on to say that “the Admiralty programme was based on months of careful studies. They aimed to make the British Navy 100 per cent, efficient.” (Manchester Guardian, May 29th, 1936.) This should give comfort to us all, the knowledge that the Navy is seeing to it that we are all rightly and adequately fed and that the gentlemen in control have been burning the midnight oil to ensure 100 per cent. efficiency. But not so fast. On turning over the pages of the same newspaper from which that piece of news was taken we find more news about our food. Dr. G. W. Theobald, of the British Post-Graduate Medical School, London, says that at least ten per cent. of our population has to be fed on a weekly budget of 4s. or less for each individual. (Dr. Theobald’s proposal was not more steel for the Navy, but that “every school should instruct girls to take iron for one month in the year to prevent anaemia.”) Another doctor, speaking at the joint conference of the Royal Institute of Public Health and the Institute of Hygiene, where Dr. Theobald made his speech, commented on the inadequate food of working-class mothers: "One finds mothers towards the end of the week living on bread and tea, and saving pennies to buy meat and pies for the boys.” Dr. M’Gonigle and M. J. Kirby, in a recent authoritative study, ”Poverty and Public Health,” have shown that there are 20,000,000 people in this country who are too poor to be properly fed. Mr. Lloyd George, in a speech at the Central Hall, Westminster, on March 13th, 1936, added his testimony (Daily Telegraph, I4th March, 1936):—

We have it on the authority of men of science, who have devoted the whole of their lives to the study of this problem, that over 40 per cent. of our fellow-countrymen are inadequately fed in a land of exuberant plenty and abounding wealth.

There are still millions living in habitations that are unfit for human beings to dwell in, and side by side with these conditions we have statistical and revenue testimony as to the enormous fortunes and huge incomes enjoyed by a few.

We find then that if the Navy’s job really is to ”ensure the arrival of our daily bread,” it falls down badly on the job. Or rather, it ensures that the working class get bread but very little else, for, according to the Medical Officer of Health for Chorley, tea and bread and butter forms seventy per cent. of the breakfast and tea meals of elementary school children in that town, “the term bread and butter” including “bread with margarine and bread dipped and fried in fat.” (News Chronicle, June 13th, 1936.)

What the Navy is really for

Of course there is no need to elaborate the argument. The Navy does not and never did exist for the purpose imagined by Mr. Churchill and Mr. Lindsay. British capitalists might at one time, even if they cannot now, boast of being mistress of the seas, but it was not for the sake of British workers. The purpose of the Navy, as of the rest of the armed forces, is to defend capitalist investments at home and abroad against attacks from all quarters. Mr. Philip Jordan, in an article on ”Empire Defence” (News Chronicle, June 12th, 1936), gives a reasonably accurate account of the reason why the Navy is engaged on keeping open the "pipe-lines” of British commerce: —

”These pipe-lines British naval strategy is concerned to preserve; for upon their unimpeded maintenance depends the ease with which tribute and life flow into imperial Britain: gold and diamonds from South Africa, cotton from Egypt, spices from Ceylon, all treasure from India, tin and rubber from Malay, wool from Australasia; and from all and more of them interest on the loans with which British capitalists dowered them in early and late days.” (Italics ours.)

Among the purposes of the armed forces is defending capitalist property against the working-class. It includes keeping the working-class in perpetual poverty, for only so can they be compelled to submit to exploitation for the good of the class which controls the political machinery, including the armed forces, and through it the accumulated wealth of the country.

What is the moral? An obvious one. The working class must themselves gain control of the machinery of Government and use it, including the Navy, for the purpose of ending capitalism. Then for the first time will the whole population be well-fed, well-clothed and well-housed.

Edgar Hardcastle

Cut and thrust (2026)

Book Review from the July 2026 issue of the Socialist Standard

Tory Cuts. By David Connolly. Self-published. 2026.

This has been advertised in the classified section of Private Eye and is clearly aimed at the sub-section of society that is actively critical about the way UK society and its economy operate. It is at times amusing and frustrating, the latter mainly because of the large number of editing errors and the rather scattergun approach to structure – there is an underpinning narrative thread, but it really does test the patience of the reader as it often meanders off on tangents. At root, it needed a much finer editorial hand.

The over-arching theme is that the approach to economic management favoured by the Conservative Party in recent decades (and to some extent Labour) is a form of neo-liberalism that has only served to damage the UK economy, engender class division and infect the UK public sphere. Connolly’s solution seems to be Social Democratic Party-style economic interventionism allied with aspects of social conservatism. In some ways it is a ‘back to the future’ scenario as all this has been tried before and the social democratic economies of Europe (Scandinavia in particular) that he lauds have now been beset by similar issues. Indeed, pretty much all of them have seen falls in their growth rates like the UK and their halcyon days seem well and truly over, with resulting social discontent which hasn’t been seen in decades and a concomitant rise of the populist right.

It should be added that there is some very selective use of statistics in this book and some of them could be questioned too (including the over-stated claim that workers in the UK are losing 10 percent of our wages for every 10 years of neo-liberalism). But it is entertaining in parts and brings out the class divide at the heart of society well enough.

The solution to the problems Connolly identifies lies not in a return to a mythical social democratic past though – a past, after all, that was perceived as being so glorious the working class elected Thatcher and her successors in gratitude. Furthermore, much of what Connolly blames on neo-liberalism and monetarist economics – such as the decline in UK manufacturing – is really much more a product of the shift in world capitalism away from many of the traditional metropolitan centres of capital in Western Europe to China, India and the Far East instead, where labour costs are lower. For instance, while it is true that the proportion of UK jobs in manufacturing fell from around 25 percent of the workforce in 1980 to about 8 percent now, in Germany it fell from around 40 percent to about 19 percent, France from 25 percent to under 12 percent and Spain from about 20 percent to 10 percent. There has been a big fall in the neo-liberal US economy too, of course, though actually less than any of these European countries, many of whom use the same type of broadly social democratic approach he favours.

Ultimately, the underlying cause of the issues Connolly is rightly concerned about is not the actions of Tory governments and those who wish to copy them like Blair and Starmer – it is the way society is organised. Class division, economic instability and an uneven, antagonistic system of income distribution are at the very heart of all market economies, irrespective of political colours. Top-down, class-divided, based on entitlement and exclusion, with untold riches for a tiny minority and salary slavery for everybody else – that’s the capitalist way and it will need a lot more than a modification of personnel at the top to make it history.

DAP

Editorial: The Budget (1948)

Editorial from the May 1948 issue of the Socialist Standard

At Budget time there is always a certain amount of excitement among the workers, rather like that about the result of the Oxford and Cambridge boat race—and with about as much justification. Always there is that mixture of hopes and fears—will beer and cigarettes go down? Will overtime be freed from income tax? Will purchase tax be reduced? Sir Stafford Cripps managed to please and displease nearly everyone, a bit on here, a bit off there. Beer and tobacco up a little, income tax down a little, purchase tax up on some things and down on others. The other principal features of the Budget were the capital levy which will raise about £100 millions from 140,000 of the very rich, the reiteration of the policy of freezing wages at their present level except where special factors justify an increase, and a refusal to freeze profits or to tax them more heavily. On this last point Cripps contented himself with a warning that if companies do increase their dividends to shareholders this year he will consider imposing a limit next year.

Speaking for the. Conservative opposition, Sir John Anderson, a former Chancellor of the Exchequer, criticised certain features of the Budget, particularly the special levy, but otherwise be welcomed Sir Stafford Cripps’ “realistic and honest approach.” The Manchester Guardian (April 7th, 1948) praised it as “a strong, honest, and radical Budget,” and remarked of the capital levy that it is “in fact a stiff individual profits tax winch falls where it should, on the large personal capital.” That newspaper’s City Editor (April 7th, 1948) went further and showed that it is not even very stiff:–

”The levy on capital will not be severe even for those holding very large amounts of capital. Assuming an investment yield of 5 per cent. the tax would amount to 2½ per cent. on a capital of over £100.000.”

We may sum up by saying that if the workers find that the Budget makes little difference to their position so do the capitalists, and this is true of all Budgets no matter whether the Government is Conservative, or Labour. It explains why the Socialist refuses to get excited about Budget prospects.

What the working class get out of the capitalist system is the wage or salary they receive for selling their energies to the employers (including the Government and the administrative Boards which are Ihe employers in nationalised undertakings), and wages follow fairly closely the rises and falls of the cost of living. This is not an automatic process of adjustment, but takes place through the pressure and counter pressure exerted by the employing class and the workers in strikes and lockouts. When prices are falling unemployment is usually heavy enough to enable the employers to force down wages. When unemployment is at a very low point, as at present, it is easier for the workers to struggle for higher wages and thus try to maintain their standard of living in face of recently rising prices. Those who urge the workers not to take advantage of the present low unemployment to press for higher wages may discover at no very distant date that the opportunity will have passed. Unemployment will be the order of the day; or, as the City Editor of the News Chronicle puts it (April 10th, 1948), ”with the country probably over the inflationary hump and perhaps set on the, road to deflation with the help of the recent Budget.” Mr. Arthur Horner, Communist secretary of the Miners’ Union, apparently is among the short-sighted. According to the Daily Worker (April 6th, 1948) he said at Leicester, “The miners had not taken full advantage of the law of supply and demand of labour. If they had wages would have been much higher.”

When Cabinet spokesmen oppose higher wages they do so because their immediate and predominant responsibility, by virtue of being the Government, is to keep the capitalist system functioning in the only way that capitalism can function, that is by enabling the capitalists to make profits. The Labour Party grew up on the mistaken belief that under Labour Government there would be great possibilities to raise wages by cutting into profits. Rather late in the day some of them, certainly Sir Stafford Cripps, have come up against the, harsh truth that those who administer the capitalist system have very limited freedom of action—on all important issues they can depart little from the practice of their Conservative predecessors. Official figures on the proportion of the national income which goes as salaries, wages and rent and profits, etc., bring this out clearly. In 1938 wages accounted for 39 per cent., salaries for 24 per cent., and profits, rent and interest for 37 per cent. In 1947 wages accounted for 44 per cent., salaries 20 per cent., and rent, profits, etc., 36 per cent. (See Economist, April 10th, 1948, p. 596.) In each case the figures are after meeting income tax.) It will be observed that the percentage going to wages and salaries together, i.e., 63 per cent. in 1938 and 64 per cent. in 1947 has hardly changed at all, likewise the percentage to rent, profit, etc.—37 per cent. in 1938 and 36 per cent. in 1947.

This is the dilemma of all Labour Governments, but no such dilemma faces Socialists. Socialism is not a scheme for redistributing wealth and income inside capitalism, but a system of society to replace the capitalist system

Notes by the Way: This Millionaire Business (1948)

The Notes by the Way Column from the May 1948 issue of the Socialist Standard

This Millionaire Business

Mr. Bernard Harris, of the Sunday Express, is worried because under Labour Government (he calls it “Socialism”) “you have no chance to-day of starting a business in Britain which will make you a millionaire before you die.” (Sunday Express, April 11th, 1948.) It seems that the harvest of millionaires has been falling for generations so that to-day “there are only 244 millionaires in Britain. They are the people with incomes of £50,000 a year or more.”

Mr. Harris does not go so far as to say that there will be no new millionaires, but he fears they won’t be hard-working lads like their fathers, but will become millionaires the easy way, “by inheritance or out-and-out speculation.”

“The self-made millionaire, in the sense of the man who has created a vast business from small beginnings, is a fast disappearing species. And he is the only valuable kind.”

He quotes an unnamed jam millionaire who was asked 50 years ago “to give 12 rules for making a million,” and replied, “Repeat ‘hard work’ 12 times.”

So the good millionaires make their money by hard work, and the other millionaires are not good ones. This leads to some curious conclusions. Lord Derby, who died in February last, left property valued at £1,937,838 (Evening Standard, April 8th, 1948), but though he inherited his estates and therefore does not fall into Mr. Harris’s group of valuable millionaires, we do not recall that the Sunday Express ever condemned him as an example of a no-good rich man. Nor did Lord Derby think it of himself. When he was Tory Postmaster-General in 1905 it was the postmen whom he thought were no good. He had nasty things to say about some of them who were trying to work up electoral opposition to him and other M.P.s because, after a Committee appointed by the Government had recommended increases of pay, the Government would not carry out the whole of the recommendations. Lord Derby called the postmen blackmailers and bloodsuckers though later he withdrew the “bloodsuckers” when he found what a storm of criticism it produced The postmen, most of them earning probably between 25s. and 30s. a week, were certainly hard-working— their employer saw to that—but it never got them anywhere.

Mr. Harris also tells us that “there were the Wills, of tobacco fame. Eleven members of that family have died since 1909 leaving a total of £38,000,000 between them.”

In November last Sir William Churchman, a director of the Imperial Tobacco Co. and partner in Churchman’s, died worth £1,102,719. (Evening Standard, 7/2/48).

These ladies and gentlemen got their wealth out of business, in the way Mr. Harris approves but if hard work is the explanation one wonders why the hard-working cigarette makers never get into the millionaire group like their employers.

The truth is, of course, that all great fortunes, whether inherited or acquired during the owner’s lifetime, came out of the unpaid labour of the working class.

* * *

The Garibaldi Communists

When Communists fight elections it is on the principle that no dishonesty is barred provided it gets votes. In Italy, according to a correspondent of the Sunday Express (11/4/48), they are appealing to patriotic sentiment.

“The Red Flag is nowhere to be seen; no hammer and sickle signs disfigure the walls. With a lack of scruple that takes the breath away they proclaim Garibaldi their hero. His head appears on most of their posters.”

However, it seems that Garibaldi’s 81-year-old daughter is still alive and she objects to Communists “hiding behind her father’s picture.”

“Her father,” she said, “never approved of Communism.” “It was founded by a German (Marx) who always hated Garibaldi.” (Daily Mail, 12/4/48.)

* * *

“Freedom of the Press” in Russia

In Russia no political party is legal except the Communist Party and no publication is permitted that opposes the Communist Party. At the United Nations Conference at Geneva on 29th March, 1948, an American delegate, Mr. Harry Martin, president of the American Newspaper Guild, was challenged to produce proof of his statement that in Russia the press is controlled by the Government. According to a Reuter and Associated Press report Manchester Guardian, 30/3/48) he did so by reading out the Statute which in 1931 gave control of publications to a State organisation known as “Gavlit.”

“It authorised the Gavlit administration to forbid the publication of any works containing ‘agitation and propaganda against the Soviet authority and the dictatorship of the proletariat.’ It entrusted Gavlit with ‘preliminary and subsequent control over published literature both from the political-ideological and from the military and economic viewpoints,’ and authorised confiscation of disapproved publications and the prosecution of persons ‘violating the demands of Gavlit, its organs and authorised representatives’.” (Manchester Guardian 30/3/48.)

The News Chronicle's own correspondent at Geneva reported that although the Russian delegate addressed the Conference after the above had been quoted “he made no reference to Mr. Martin’s quotation.” (News Chronicle, 30/3/48.)

* * *

Japan’s the Friend, not China

Honor Tracy, correspondent in Japan of the Observer, reports that American policy has taken a new turn. “Under this policy Japanese economy is to be restored as quickly as possible, with liberal American help, in the hope of creating better conditions, not only in Japan herself but in the Far East as a whole. Japan is thus to become ‘the workshop of Asia’ as she has always claimed is her proper function.” (Observer, 11/4/48.)

The Report continues :

“Travellers returning to Tokyo from China report . . . indignation that the proposed grants and loans to Japan during the present year should be so much greater than what is being offered to China. The American view, on the other hand, is that China is now disintegrating so fast as to make outside help ineffective.”

It looks as if the “brave Eastern allies” in next war may be the Japs, while China qualifies for the position of a horrid dictatorship.

* * *

Lancashire’s Exports

Mr. Harold Wilson, President of the Board of Trade, speaking in London on 9th April, 1948, referred to the struggle to find markets abroad for textiles. “Although the problem of production of textiles this year’ is going to be the biggest problem this country has ever faced, the problem of selling them is going to be even greater, particularly in face of the enormous import restrictions in three-quarters of the trading world. We have put strong diplomatic pressure on every country which is imposing restrictions against us and we have in our various trade negotiations made it a cardinal point to try to open the market wherever possible …” (Manchester Guardian, 10/4/48.)

One of Lancashire’s competitors is Japan and another is U.S.A. Mr. Ewing, Chairman of the Bradford Dyers’ Association, according to a Manchester Guardian report of a speech, “was worried about Japanese competition. Exports of Japanese cotton textiles increased rapidly during 1947 and were equal to three-quarters of Lancashire’s trade. The United States was also developing export trade. Mr. Ewing therefore stressed the need for quality and inventiveness.” (Manchester Guardian, 12/4/48.)

In the meantime, while Japan fights to sell more textiles outside Japan, U.S.A. to sell more textiles outside U.S.A., and Britain to sell more outside Britain, the President of the Board of Trade tells us that “if textile, production does not buck up the clothing ration may have to be reduced.” (Daily Mail, 13/4/48.)

* * *

Is the Church an Essential Industry?

A News Chronicle reporter tells readers that “latest figures show that only 4,000 vicars and rectors have a net income of between £400 and £500 a year. Five thousand earn less than £400—and some hundreds have even less than £300. (News Chronicle, 10/4/48.) He says that parents today will not enter their sons for the Church because of the low pay and “a drive has begun to establish a £500 minimum for vicars and £260 for assistant curates.”

This is all very well but is the Church so other worldly that it hasn’t heard about “wage-freezing” and the policy of allowing increases only in essential industries or where there is increased production?

* * *

Social Reform is not Socialism

While the Daily Express (8/4/48) tells us that things are worse here than in America because “in Britain we have Socialism,” the Daily Mail will have none of it. Criticising a speech in which Mr. Attlee claimed we have had our Socialist social revolution the Mail wrote (24/1/48) :

“For such claptrap read ordinary ‘social reform.’ Bigger names stand upon that role than those of Attlee and Bevin. We cite Disraeli, Chamberlain, Asquith, Lloyd George, Churchill, Baldwin.”

We can leave them to fight out the issue which party achieved more reforms of capitalism. As Socialists we heartily endorse the statement that it is claptrap to describe social reform as Socialism.

* * *

The “Daily Worker” is disappointed with Indian Capitalism

Socialists never supported the Indian Nationalist movement, knowing well that the propertied interests which financed and controlled it were only concerned with making India safe for Indian capitalism. Not so the Communists. They urged Indian workers to support Nehru and the Congress Party. Now the Daily Worker professes to be astonished because Nehru’s government treats the Indian workers in the same way that they were treated under British rule.

“What is happening in India? The British trade unionist may well rub his eyes in astonishment. Trade union leaders are being arrested and repressive action is being taken against the Communist Party . . .

“Such happenings were frequent under British rule, but India is now said to be free . . . The plain fact is that little has changed in India except that it is now ruled directly by the Indian capitalists, landlords and princes by grace of the British Imperialists.” (Daily Worker, 9/4/48.)

There is nothing to cause astonishment in the discovery that Indian capitalism is like any other hut how comes it that the Daily Worker should ever have supposed that it would he different?

Edgar Hardcastle

The Common Market Special Survey: 1. The Background (1962)

From the January 1962 issue of the Socialist Standard

A shiver of apprehension is running through the national press as cabinet ministers and captains of industry set about the task of preparing the public for what to expect if Britain’s application to join the Common Market should be accepted. Mr. Macmillan calls it “a bracing cold shower we shall enter, not a relaxing Turkish bath” and one of the industrial bosses thinks it will rather be “an icicled channel swim at nought degrees Centigrade.” Prophecy is dangerous, but the chances are that within 15 months from now this country will be part of the European Economic Community.

What reasons do the British ruling class put forward for having to join the Common Market? Why should Britain shift the traditional centre of gravity of her economy from the Commonwealth to Europe? Why should she wish to wind up the European Free Trade Area (EFTA) she had only recently been instrumental in creating? And what effects will this have upon the British working class?

Weakened and impoverished by the ravages of World War II, the rump of continental Europe lay prostrate in front of the Iron Curtain, useless to the bloc of Western powers dominated by the United States of America as a profitable market, useless in the game of power politics as a defence against the rival bloc grouped around the Soviet Union. Only an economically healthy Europe would offer reasonable guarantees of safety to the American world of finance and industry. And so from the dust and ashes there arose new life, frantic activity, a giant mesh of scaffolding throughout Western Europe, factories, banks, stores, communications shot up at breakneck speed—financed by a massive programme of American aid and investment. The Marshall Plan "of which the sole condition was that the countries of Europe must band together and agree upon a joint recovery programme.”

British industrialists watched with consternation ultramodern plant swinging into action across the channel. But with both the home market and the Commonwealth, with its established system of preferential duties, crying out for manufactured goods after the shortage and wastage of the war years, profits were still secure in spite of outdated plant and methods.

Powerful vested interests were haunted by the fear of a resurgent Germany, the spectre of Krupp and Thyssen—the giants of the Ruhr and the power behind the expansionist militarism both of Prussia and Nazi Germany. German industry was not to be permitted to swallow all the plums in the new Europe. Markets, capital, labour and raw materials were to be divided fairly between the power groups. By 1953 the European Coal and Steel Community (ECSC) was a going concern comprising the coal and steel industries of Federal Germany, France, Italy and Benelux (Belgium, Netherlands and Luxemburg). The Origins of the Common Market.

There was one weak link; Belgian coal was too expensive. Throughout the mining belt across the south of Belgium mines were shut down and miners were out of work in their thousands. But the Belgian mine owners had been helped over the critical period with massive subsidies from the international High Authority administering ECSC. Capitalism had pulled a new card from its sleeve. For coal and steel, ECSC meant larger markets, bigger production, better exploitation of capital and labour, fewer irksome administrative barriers, discriminations and quotas. Why not extend the idea to the economy as a whole?

By March, 1957, there was signed the Treaty of Rome which launched the six participants in ECSC on the road towards the Common Market. Its object was:

“To permit goods to travel freely without Customs Duties or quota restrictions, throughout the area of the Six and thus to permit manufacturers to invest on the scale that modern technology makes possible and necessary.”

Customs duties between the Six were to be whittled down progressively in three successive phases of four years each. At the same time a uniform external tariff wall was to be erected around the Six. Allowance was made for differences between the Six in terms of industrial development and efficiency or productivity, for differences in wage levels between member countries. It was obvious that the impact of a progressive crumbling of Customs duties would have serious effects on certain industries and even countries. To soften the impact the Six adopted a device successfully tried out by the Benelux countries from the start of their Customs Union almost immediately after the last war—a Compensation Tax. Being flexible, this tax can be used to ensure, in the interest of the ruling class of the Six as a whole, that individual national groups of an industry do not cause too much of a disturbance in any specific field.

Big industry and banking seized the opportunity with both hands; American capital poured into the Six. Displaced Persons, human flotsam, waiting to be employed as cheap labour, were overflowing in German refugee camps. Italy, where starving millions were considered a potential communist threat, had been given a major blood transfusion of U.S. dollars and was starting a massive programme of industrialisation with huge reserves of agricultural labour waiting to be drawn off the land in Southern Italy and fed onto the new industrial treadmill.

Developments were rapid. Before the end of the first four-year period the programme of whittling down of Customs Duties had been exceeded by 18 months. Inter-Common Market tariffs are now 30 per cent. below their 1957 level and may be 50 per cent. down by the end of this year. The process may be completed by 1965 if not before.

In the meantime the British ruling class was taking only a modest interest in the Common Market. How modest will be seen from the fact that that even as late as 1960 British private direct investment within the Six (excluding oil and insurance) amounted to no more than £21 million as compared with £208 million invested in the Sterling Area outside the United Kingdom during the same period. In a good many fields British industry was not even interested in exports of any kind. These were the people who could sell all they could manufacture in the home market behind the cover of a high protective tariff wall and in the expectation that the halcyon days were here to stay. Their plant was being amortized at a comfortable rate and foreign competition could not touch them. To break into the fiercely competitive outside world meant hard work, expense, lower profit margins. Why bother?

But in the Commonwealth things had been happening. Preferential treatment of British goods had disappeared under a great many headings in the Customs Tariffs of Commonwealth countries which are fast building up a market for their products in Europe.

Nonetheless certain Commonwealth countries, notably New Zealand, still depended largely on the British market for their livelihood and raised vociferous objections to any thought of a British commitment with the Six unless their special interests were safeguarded.

Powerful British interests also disliked intensely the possibility of a political entanglement with the Six.

It was all too complicated. Couldn’t the remaining uncommitted countries of Europe (Denmark, Norway, Sweden, Switzerland, Austria, Portugal) be brought into some form of association more to the liking of the British ruling class, without the embarrassment of. political implications and interference with existing Commonwealth trade? Their 97 million people (including the United Kingdom) would not compare with the home market of 170 millions of the Six, but it was better than nothing. And it would strengthen Britain’s hand in any later approaches to the Six. Thus was born the European Free Trade Association (EFTA) or “The Seven.” Finland has since joined making EFTA “The Eight.” Its purpose was to be strictly limited to the progressive reduction of Inter-EFTA Customs Duties and quantitive restrictions.

Now the prospect of an enlarged Common Market of 250 million people or more discriminating against U.S. goods is beginning to alarm the American capitalists. Already pressure groups are at work promoting a direct U.S. participation in the Common Market. This, to quote, the Herter report, “with its highly developed industrial and technological complex and its disciplined workers, would comprise the most efficient workshop in the world” where since 1958 trade among the Six had risen by about 50 per cent. . . .

What is involved in the British application to join the Six, for industry and finance, and what does it mean to the British working class?

If agreement should not be forthcoming, British industry could well find itself faced across the Channel with a fast-expanding, highly efficient and ultramodern competitor of great striking power. Many British manufactured products may disappear from the markets of the world which would entail a major re-alignment of industry. The usual flow of capital from the weak to the strong will be accelerated. The harder it became to export finished goods, the more British capital might have to seek investment abroad for overseas manufacture, albeit in return for smaller profits.

Designed to fit the present requirements of Western capitalist society, the Common Market has, like any other capitalist institution, no permanence. It will be discarded when it ceases to be profitable. To the British worker it reinforces the constant threat for the worker under capitalism of insecurity and unemployment,

Tisserand.