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

Editorial: Heartbreak House: The Swindle of Nationalisation. (1945)

Editorial from the October 1945 issue of the Socialist Standard

Leaders of the Labour Party, with the active support of the Communists, are putting over a monstrous deception on the workers in the mining and other industries.

If Conservatives were now in power they would be telling the workers that it is necessary for them to work harder in order to replace what has been destroyed by war and to produce articles needed owing to the present scarcity of coal, clothing, food, etc.

After the last war the same tale was told—and in due course the workers reaped the harvest of increased production in the shape of glutted markets, unemployment and wage cuts. Remembering what happened then many workers would now be sceptical about such propaganda if it came from Conservatives and the employers generally. They would suspect that they were again being tricked into sacrificing themselves for the benefit of capitalism and the profits of the capitalist class.

Now the propaganda campaign is in full swing again, but this time it comes from the Labour Party and Communists and it is baited with the pretence that under Nationalisation greater production will benefit the whole community and not the propertied class.

Mr. Michael Foot, Labour M.P., writing in the Labour organ, the Daily Herald (August 7th, 1945), puts the Labour Party case:—

“Partly owing to the war, there is a severe physical shortage of all the goods required to provide an abundant, life, and if that abundant life is to be assured in the future certain immediate privations will have to be endured in order to restock the capital industries. No Tory Government could make this appeal, for the worker would suspect that the summons to hard work, discipline and abstinence would result only in fortunes for the few and the later wastage of unemployment. The new Government is in a different situation. It also must appeal for hard work, discipline and, for a short period, continued abstinence. All these are needed to increase the total wealth for distribution, but a Labour Government at the same time can give concrete proof of its resolve to use this wealth for the benefit of the whole community. By its social insurance and health and housing plans it can show its determination to secure a greater equality in the distribution of wealth. By its nationalisation proposals it can show its resolve that the re-equipment of industry shall not merely bring greater profits to the few. By its financial measures it can prove that, when this period of shortage is over, no return will be allowed to wasteful unemployment.—(Daily Herald, August 7th, 1945). 

Mr. Foot in his article was answering criticisms made in the Economist, August 4th, the central point of the criticism being that if the owners of a nationalised industry receive as compensation the same income that they were drawing already there is no surplus from which the workers could receive higher wages unless (through more machinery, greater efficiency and harder work), the productivity of the industry is increased. Mr. Foot’s answer is that the Labour Government will get this greater productivity and it will benefit the workers and "not merely bring greater profits to the few.’’ (our italics).

The Labour Government having in the words of the Daily Herald, convinced the electorate "of its detachment from class interests '' (i.e., working class interests), and "of its devotion to the welfare of the whole community". (Daily Herald, August 1st, 1945), no longer adheres to its old propaganda in favour of drastically redistributing the national income in order to help the workers.

Instead it has taken over the familiar capitalist argument that the only way to improve the lot of the workers is to increase the total national income. Mr. Herbert Morrison clinched this in his speech to the National Conference of Labour Women on September 5th:—

“If we were to be able to provide better benefits under the social insurance measures, reduce taxation, and provide more of the goods of life for everybody, the only way was by increasing the total national income ... it could only be done by work, thought, drive and initiative."(Daily Telegraph, September 6th, 1945).

In the same speech Mr. Morrison justified himself by the plea that "there was a limit to what could be achieved merely by transferring money from one person's pocket to another’s,” and went on to explain why, in the interests of efficiency, the Labour Government holds it necessary to reduce taxation on the profits of the capitalists.

A few days later the Communist, Mr. Arthur Horner, National Production Officer of the National Union of Miners and President of the South Wales Miner’s Federation added his piece to the campaign. He told a Press Conference in London that he was asking the miners to increase output by 10 per cent. On the ground that The Mines are to be nationalised he

“asked the workers in the pits to adopt a new attitude . . . Hitherto the policy of the Union had been to get what they could out of the owners. Now they had taken on the responsibility of assisting in running the industry they must accept new methods. They must take a more active part in assisting greater technical efficiency and increasing output.”—(Daily Telegraph, September 7th, 1945).

This new emphasis on the capitalist doctrine that the workers can only get more by producing more, contrasts glaringly with what the Labour Party and the Communists were saying just before the war. Compare Mr. Morrison's statement now with the Labour Party pamphlet “The Nation's Wealth at the Nations Service.”—(Douglas Jay. Labour Party, 1938).

Mr. Jay wrote :—

“Labour's ultimate objective in economic policy is the removal of unjustifiable inequalities of wealth and opportunity by the transfer of private unearned income and capital into public hands. There exists something like £1,200,000,000 of annual unearned income in Britain to-day; and probably two-thirds of this is inherited income which the recipients have done nothing to earn or deserve.

Fortunes totalling nearly £600 million are left every year by private persons mainly to their own friend, and relatives, many of whom are already wealthy. Here is the available reserve and capital on which Labour must draw to supply the minimum human needs of the poorest . . . .”

He went on to say that “a far greater transfer of wealth can be achieved than any yet attempted, without any dislocation of the community's economic life.”

Another indication of the Labour Party's change of front is their present complete silence about, the “capital levy.” After the last war this device, which was offered as a means of transferring wealth from capitalists to workers, occupied first place in the Labour Party programme.

So much for the Labour Party since it has progressed from the pre-war political wilderness to the milk and honey of office.

Let us now consider what Socialists have to say about the whole problem of producing and distributing the articles needed by the community. Let it be emphasised once again that the Socialist case is poles apart from that of the Labour and Communist parties.

At present the means of production (land, factories, railways, etc.), are the private property of a small minority of the population, the capitalists. By virtue of their ownership they draw a large unearned income in the form of rent, interest and profit from the wealth produced by the working-class. The Labour Party's remedy for the poverty problem is (while leaving the greater part of capitalist, industry unchanged), to introduce a purely nominal change of ownership in certain industries that are to be “nationalised." Instead of receiving incomes in the form of dividend on shares in mining or railway companies the present owners will relinquish direct ownership and receive instead approximately the same capital and income in the form of Government stocks and the interest thereon, and the existing gross inequality of property and income will not be affected.

But there is a snag in this from the point of view of trying to run with the hare while hunting with the hounds. The Labour government have promised “fair compensation" to the owners in nationalised industries and are committed to enabling the capitalists in private industries to obtain a “reasonable return on the capital employed" (Sir Stafford Cripps, Daily Herald, August 13th); but they are in the dilemma of also having promised higher incomes to the workers which, under the conditions laid down, can only come from an increase in the workers' output.

The only real remedy is one the Labour Government cannot employ because they did not seek at the election a mandate to abolish capitalism. If capitalism were abolished and socialism introduced there would immediately be two big developments through which the poverty, problem of the working class could be solved by increasing the number of men and women actually engaged in production. One is that the members of the capitalist class, no longer able to live in leisure and luxury at the expense of the workers, would become useful members of the community helping to produce the articles needed by the community. The second is that all kinds of activities necessary to capitalism but unnecessary under Socialism would cease, and this would free millions of workers for production who are now engaged in banks, insurance companies, and advertising, or in the taxation and rating departments of the Central and Local Government; as well as those now required by the capitalists to serve in the armed forces for the competitive struggle with foreign capitalist groups. As is explained in our pamphlet "Socialism" the output of wealth could be at least doubled by these means.

This is the only way in which the poverty problem can be solved and the Labour Government, trying to run the capitalist system, cannot solve it. What they are doing is to act as Caretakers for the capitalist class, calling on the workers to increase output (just as a Conservative Government would have done), but using seductive arguments about “service to the community" which would only be justified if in fact the means of production had been transformed or were going to be transformed into the property of the whole community. While maintaining (with merely superficial changes), the system under which the capitalists exploit the working class, the Labour Government are pretending that exploitation has ended.

It is clever propaganda, but the realities of the class struggle between those who own, but do net produce and those who produce but do not own, will not for long be smoothed over by even the most plausible Labour-Communist orator. The working class faced with the same old ruthlessness of capitalist employers, of Government Departments and of the Boards of the Mining and Transport undertakings when “nationalisation" takes place, will find that they have no defence except the limited defence provided by their own trade unions. In strikes and lockouts the web of half-truths spun by the Labour leaders will be rent asunder, and the workers will have made an advance towards the necessary understanding of the fact that Socialism has nothing in common with Labourism.

50 Years Ago: The Capital Levy (1973)

The 50 Years Ago column from the August 1973 issue of the Socialist Standard 

In the “Forward” (Saturday, May 5th, 1923), Mr. F. W. Pethick Lawrence, a Labour candidate and prominent advocate, sets out what he calls “The Case for the Capital Levy,” with the sub-title, “Lift the Burden of Debt from Industry and Labour.”

★

If the burden rested on the backs of the workers it might be worth while trying to throw it off. But if the workers have no surplus, then they cannot be robbed of what they don’t possess; and, in spite of apparent objections, the workers as a whole do not suffer from high, nor benefit from low taxation. They suffer because they are robbed, and they are robbed whether taxes are high or low, and the degree of the robbery has, over a period, no direct or indirect relation to taxation. As we have seen, the workers receive all the wealth they possess from the capitalist owners, and, further, these owners control at present the machinery by means of which taxes are levied.

Now, the workers either receive a surplus over their minimum needs or they do not. If they don’t, then they cannot be robbed of that non-existent surplus afterwards. If they do, then the capitalists will have given the surplus either because they are philanthropists or because they are compelled by economic forces. If they are philanthropists, then they will not take back the gift they gave; and if they were compelled to give, then the same forces will prevent them from taking it back.

★

The pertinent question Lawrence might answer is this : Would the capitalists, if there were no taxation at all, give the workers a larger share of the wealth produced, and, if so, why?

Mr. Lawrence says : “The main principle of the levy is simplicity itself. It is to pay off debt out of wealth. The wealth of the country as a whole is the wealth of its citizens.” This, as I have already explained, is quite untrue. The wealth of the country as a whole is the private property of the capitalist class. Only the owners of property can suffer the burden of taxation, and only the owners do suffer. Some of them want you, the propertyless workers, to pull their chestnuts out of the fire, and Mr. Lawrence and the Labour Party are making a bid for office on the strength of offering to do the necessary publicity work.

★

While the capitalists will on the one hand be relieved from the burden of paying the debt interest, they will also, on the other hand, be deprived of the present means of paying that interest. Some will gain by reduced taxation what others lose by the paying off by the State of their quota of the debt and their consequent loss of interest on their bonds. The money paid out will, in its turn, be reinvested in industry, and we shall be as we were.

(From an article by E. Hardy in the Socialist Standard for August 1923.)

H. G. Wells’ idealism and the working class (1925)

From the September 1925 issue of the Socialist Standard

It has often been said that the ideal society will be one in which its members consciously direct their efforts for common good. In the moment when every man will promote the interests of his fellow men regardless of his own individual preferences, so soon will the highest conceivable stage of social progress have been reached. This popular view is also upheld by “pseudo-Socialists.” H. G. Wells, in his “Outline of History,” states

“that the impulse to devotion, to universal service and to a complete escape from self . . . which ebbed so perceptibly during the prosperity, laxity, disillusionment and scepticism of the past seventy or eighty years will re-appear again, stripped and plain, as the recognised structural impulse in human society.”

This Christian sentiment, so lofty and admirable as it appears at first sight, devolves into a very mischievous doctrine—a common consequence of Christian ethics. Here we are led to imagine society as being an undivided mass of individuals each one being capable of a free-will offering to the common prosperity. The idea implies that poverty and all social inequalities can be accounted for by a lack of certain tender feelings on the part of the richer individuals. Mr. Wells has discovered that they have not sufficiently exercised their “impulse to devotion, universal service, etc.” Then what is the remedy? Surely, to convince these misguided wrong-doers of the errors of their ways and persuade them in the Wellsian manner—whatever that may be—to pay more regard in future to the interests of their poorer neighbours. Presumably, they are required to part with a portion of their wealth and distribute it among the unfortunate beings who somehow managed to combine a Christian heart with an empty pocket. It was with exactly this end in view that the Labour Party launched their scheme for a Capital Levy. This was indeed a brilliant idea, concealed in the Gospel of Christ, obscured for nineteen hundred years of misery and want, and re-discovered at last by Mr. Pethick Lawrence under the inspiration of Mr. Wells ! There is but to allow for a Labour Government to give practical application to the divine plan and behold, labour shall cease its awful strife with capital and both shall for ever go arm in arm together. But in the meantime, let us repair to the churches to solicit the spiritual aid of Jesus Christ and Mr. Wells, his prophet !

The Capital Levy might satisfy the Labour Party but it offers no solution to the economic problem. So long as Capitalists own the means of life, so long will the workers be enslaved as wage-earners and poverty prevail. They must concede to the condition that their portion of the wealth produced by his labour—whether paid in the form of wages, salary or otherwise—shall be reduced to something like a living minimum. If he declines this condition, his labour-power is not purchased and he is left to starve into submission. The worker’s prospects under the present system are, therefore, in general entirely hopeless and the Capital Levy can have no effect whatever upon his economic status. The only logical solution to the worker’s problem is to grapple with its roots. The secret of the Capitalists’ power is the fact that they own the means of production, giving them illimitable authority over the whole social system. The worker’s aim, therefore, must be to capture the means of production. This is a task in which the solemn worship of divinity in any form will avail nothing. It will be accomplished only when a workers’ class-conscious majority has achieved political power and wields it in the communal interest. This being established, social progress enters upon a new lease of life which is the only Socialism.

To the sentimental advocates of “complete escape from self,” there is one unmistakable reply—it is unhuman. It does not conform with man’s mental make-up. We have to admit that the first, greatest and happiest effort of the individual is to consider his own welfare. But in human society—and possibly among the higher animals—there is a conscious co-operation between individuals for the purpose of facilitating the struggle for existence. This combination of effort occurs only in the presence of a common enemy, whose defeat can better be secured by social rather than by individual effort. In other words, “mutual aid “—as this co-operative practice is called—is adopted under pressure of necessity when the individual welfare is being threatened. Apart from the union of similar egoistic ambitions, it has no existence; it rests, not on any moral basis, but only on one of utility.

The truth of this interpretation of “mutual aid” is borne out in the facts of modern industrial history. The workers are to-day expressing dissatisfaction with their standard of living. This discontent is manifested in the Trade Unions in which each member aims at promoting his own individual interest, or rather, we should say, apparent interest. To do this more effectively, he is obliged, often against his immediate desire, to unite with his fellow-workers and employ the machinery of the Trade Union to fulfil the common collective demands of the whole body of workers. In order to benefit individually, the workers must act collectively; it is a condition forced upon them by the very magnitude of the modern economic system. They, therefore, employ “mutual aid” but essentially to further the apparent interests of the individual, that is to say, an improvement in the standard of living. For no other cause will they co-operate than for this egoistic purpose.

But this process, as practised to-day by the Trade Unions and the Labour Party, is confused with an element of ignorance. The workers are being educated into the false view that their economic emancipation lies at the far end of a series of steadily improving scale of wages. All that the workers are taught is to strive for a slightly larger share of the wealth they produce. They seek only to gratify their immediate and apparent interests. The result of this policy has been the ever-increasing poverty by which the present society is distinguished.

The Socialist Party, based upon a thorough understanding of the Capitalist mode of exploitation, makes full use of this experience. Under the present economic system the worker receives only a small fraction of the wealth he produces. His scale of wages is determined, on the average, by the cost of his subsistence and the reproduction of his kind. An increased wage scale is, therefore, only of temporary benefit to the workers. The solution of the Socialist Party, briefly stated, is to secure, not a larger fraction of the wealth produced, but actually the whole value of the productions. It is the one indispensable condition by which Capitalist exploitation will definitely cease to exist and for which the class war, as the collective endeavour of individuals, must be waged.

Socialism, therefore, far from advocating “escape from self” really preaches the doctrine of self-interest as the essential feature of a contented community. It is the ideal by the attainment of which the emancipation of the working class and, with it, of society at large will be established. The workers must learn to cease being satisfied with the crumbs which fall from the richly spread table of Capitalism, Nor is it enough that when the crumbs cease to fall, they beg like Oliver Twist for more. They must stimulate their individual interests to the fullest limit and vote for Socialism, i.e., the collective ownership of the means of life It is a simple doctrine, but an all-engaging one. Any ideal short of this may very aptly conform to the reactionary elements of Christianity. But it is not Socialism and will lead society to anything but complete emancipation.

“THOUSANDS”

Election Manifesto. (1923)

From the December 1923 issue of the Socialist Standard

Fellow Workers,

Five years after the official ending of the “War to end War” we find the successful ones still unable to agree upon an amicable division of the plunder. So fierce have been their quarrels that one of the “defeated” countries, Turkey, has emerged from the turmoil stronger, economically and territorially, than she was before the War !

Among the Allies France has been the only one with a direct and clear policy. This policy is the apparently simple one of smashing Germany and stealing the ore and coal areas of the Ruhr, the Saar Basin and Silesia. That, of course, will mean “no Reparations.” But the ruling class in France are not much concerned over that. The policy mentioned suits them best.

France is more than half an agricultural country, but her peasants are scattered, difficult to organise, and slow to move together. The Industrial capitalists, on the other hand, are compact and well organised, and so easily retain control of political power, which they wield for their own purposes. At present the peasants are cajoled with the tale of “Germany must pay,” while the small business man is deceived by the yarn that the expensive Ruhr occupation is only for the purpose of proving whether or not Germany can pay. As taxes are relatively light, trade fairly good, and those who would otherwise be unemployed are called up into the army—a point Mr. Garvin carefully ignores—the big Industrialists can carry on their schemes without much protest.

The furtherance of these schemes includes the allowing of Monarchists to gather stores of small arms for their “loyal” bands, and to assist, nay even organise, gangs of criminals and slum rabble, to proclaim a “Rhineland Republic” in the name of “self-determination.” To balance this, however, workers striking for a living wage are ruthlessly shot down. As the rest of the ”Loving Allies” cannot agree upon a common policy, France pursues her course unchecked.

In England one section of the master class, who fear the competition of a restored Germany, are supporting the French policy, while another section, who hope to find markets for their goods in Germany, call for intervention to prevent the total breakup of that country. Germany is on the brink of chaos, and, to prevent that, rapid action is necessary. But what action should be taken?

Twelve months ago the Conservative Party was returned to power to deal with three main problems : Russia; The Situation in Europe ; Unemployment. They proposed to deal with these questions by the method of “Tranquillity.” The present Dissolution is an admission of their complete failure either to solve these problems or find tranquillity. Apart from the attempt to revive “Protection” as an issue, the situation has some peculiar points.

We do not rate Mr. Baldwin’s intelligence above the mediocre, but we would not dare to place it so low as to imagine for a moment that he believes that his half-baked, ambiguous, Protection proposals could have the slightest real effect upon so serious a situation. He must have known that these proposals would split the Conservative Party, while the throwing over of Austen Chamberlain and Lord Birkenhead cannot be explained away by gossip of Undersecretaries.

Consider the position of the two men. Both are front rank platform propagandists, but there the similarity ends. Birkenhead is a very useful and entirely unscrupulous political tool, but that is all. Chamberlain, on the other hand, is a big industrial magnate, possesses considerable influence, and carries a name still of considerable power with certain people. He is almost the last man the Conservative Party would throw over for an Under-Secretary—or a dozen of them. Further evidence of the peculiar situation is given in the leading article in the “Daily Telegraph” (16/11/1923), where, in careful language, the impression is conveyed that not only will the Conservatives be likely to sustain defeat at the polls, but that is probably the best thing that could happen in the circumstances.

These factors seem to point to the conclusion that Mr. Baldwin and his colleagues wish to evade the responsibility of attempting to deal with the menacing situation in Europe and so, under the smoke screen of “Protection,” they hope to escape from office and leave someone else to try and wade through the morass. But who is to take their place?

The Liberal Party, despite all the stale promises about peace in their programme, carefully avoids saying how that peace is to be reached. When that programme a read through it will be found that, apart from a few vague generalities, the Liberal Party proposes to leave things in all essentials just as they are now. That Party is no more anxious than the Conservatives to come to grips with the realities of the situation.

The Labour Party’s programme contains a most imposing array—of Promises. Their chief plank is the section for dealing with the unemployment, where a large number of expensive schemes are put forward for the purpose of finding work for the workless. Expensive schemes, however, cost money, while the Labour Party are pledged to “Relief for the Taxpayer.” To fulfil this lateter pledge they propose to reduce Income Tax, Food Duties, Entertainments Tax, and the Corporation Profits Tax. How then can they pay for schemes of work? Quite simply. They propose to institute a “War Debt Redemption Levy”—which sounds so much nicer than “Capital Levy”—and from the saving effected, accompanied by the necessary increase in Taxation of Land Values, all the money required will be found. In other words, the Labour Party proposes to reduce Taxation by raising the Taxes !

For the working class the problem takes on a different aspect. Even if the “victorious” capitalists compose their particular differences over the plunder from the Great War the cause of unemployment, and national wars, would still remain.

While wealth is produced for private profit only that number of workers will be employed that is required to produce for the effective demands of the market, plus those attending to the personal wants and pleasures of the capitalist class. With improved means of production—and war accelerates the improvement of these means —fewer workers are required to turn out a given amount of wealth. As these improvements are brought into being far faster than either the growth of population or the waste of the master class can keep pace with them, it is evident that, apart from temporary fluctuations, unemployment is bound to increase. Even the temporary fluctuations tend to decrease as capitalist control becomes more highly organised in International Trusts or Rings.

None of the political parties at present represented in Parliament desire the abolition of the private ownership of the means of life. Conservatives, Liberals and Labourites openly repudiate any such intention, while the Communist Party by its support of, and endeavours to crawl into the Labour Party, shows its readiness to support capitalism in practice, contradictory though this may be to Communist theoretical claims.

Only by abolishing the cause of unemployment, wars and misery can the workers achieve health and happiness. The workers must give their attention lo the abolition of this cause—the private ownership of the means of life.

The master class rule to-day because the workers have voted them into Parliament —the great law-making and force-raising portion of the political machinery. With this power in their hands the masters can dictate terms of living to the workers, because with the forces mentioned above at their disposal they can not only keep the workers away from the means of production but also from any wealth already produced. The workers lives are thus under the control of the capitalist class. In other words, the workers are slaves.

And slaves they will remain until they acquire—first the knowledge that they are slaves ; then the will to attain freedom ; and build up the organisation necessary to capture political power.

The only organisation capable of reaching that object is a Socialist organisation. Until that organisation is sufficiently strong to put forward its delegates as candidates, it must continue its educational work of making Socialists.

There is a Socialist organisation in this country—THE SOCIALIST PARTY OF GREAT BRITAIN—the only organisation that works for the emancipation of the workers. As a sufficient number of the working class is not yet desirous of establishing Socialism to permit of any candidates being put forward at this Election, we call upon all those who wish for Socialism to express their wish by going to the ballot-box and voting for socialism by writing it across the ballot paper. Among other things this will help to advertise the number who wish to see Socialism established. Any use of the vote to support any of the candidates in the present Election would merely be a vote for capitalism.

STUDY SOCIALISM. BECOME SOCIALISTS. THEN ACHIEVE YOUR EMANCIPATION.

Executive Committee,

S.P.G.B., Nov., 1923.

Editorial: The "Mountain and the Mouse." (1923)

Editorial from the December 1923 issue of the Socialist Standard

We have often been told that what we need in Parliament are “good business men” with “practical knowledge and sound instincts.” So when the Conservative Party obtained a majority of seats at the last General Election they took the opportunity of Mr. Bonar Law’s ill-health to put one of the foremost “business men” of the country at the head of affairs. By all the accounts in the Conservative and Liberal press Mr. Baldwin not only possessed wonderful business qualities and acumen, but was fond of home hobbies, such as rearing pigs. Surely a paragon beyond compare.

Less than twelve months has been sufficient to expose the absurdity of these claims. The Liberal press for some time past has been denouncing Mr. Baldwin’s weakness in “giving way” to M. Poincairé over the Ruhr question and the support by the French of the “Separatist” gangs in the Rhineland. Now the “great genius,” baffled by the complexity of the problems and interests assailing him on all sides, can think of no better solution than throwing-up the sponge and dissolying Parliament.

The reason given out in public is that the Prime Minister wishes to be absolved from Mr. Bonar Law’s pledge to tranquillity, particularly in relation to the Fiscal system, so that he can tackle the problem of unemployment, which

  “threatens to impair permanently the trained skill and the independent spirit of our workers, to disorganise the whole fabric of industry and credit and, by eating away the sources of revenue, to undermine the very foundations of our national and municipal life.”—(Mr. Baldwin’s address to his constituents. Observer, 18/11/1923.)

An appalling prospect truly ! And what has brought about this terrible predicament? We are told :—

  “In large measure this state of affairs is due to the political and economic disorganisation of Europe consequent on the Great War.”

While further on it is stated :—

  “The disorganisation and poverty of Europe, accompanied by broken exchanges and by higher tariffs all the world over, have directly and indirectly narrowed the whole field of our foreign trade.” (Ibid).

Here then is a situation so desperate that only giant remedies can be adequate. As Mr. Baldwin says, it is no time for palliatives. Let us turn then to his, and the Government’s, proposals on this tremendous problem, and see how “great business men” with the marvelously endowed brains so worshipped by the late W. H. Mallock, offer to solve the problem.

Were the position less serious, the proposals would arouse ribald laughter at their grotesque and childish character. A school child would be jeered at if it put forward such an idiotic “remedy.”

The main proposal is “to impose duties on manufactured goods” with the following objects :—

  “(i.) To raise revenue by methods less unfair to our own home production, which at present bears the whole burden of local and national taxation, including the cost of relieving unemployment.

   (ii.) To give special assistance to industries which are suffering under unfair foreign competition.

   (iii.) To utilise these duties in order to negotiate for a reduction of foreign tariffs in those directions which would most benefit our export trade.

  (iv.) To give substantial preference to the Empire on the whole range of our duties with a view to promoting the continued extension of the principle of mutual preference which has already done so much for the expansion of our trade, and the ‘development, in co-operation with the other Governments of the Empire, of the boundless resources of our common heritage.'”

Did ever such a mountain bring forth such a mouse? If the cause of the desperate situation is “the political and economic disorganisation of Europe,” how can a tax on manufactured goods entering one country, touch, let alone cure, that disorganisation? And what are “manufactured” goods?

Steel sections are manufactured goods of the steelworks, but are raw material for the shipbuilder, builder and engineer. Mr. Baldwin does not even tell us what manufactured goods are to be taxed. And the first object of the tax contains an insoluble contradiction.

If revenue is to be raised by the tax, then the goods must come into the country for this revenue to be realised. But if this occurs, then the unemployed in those branches will still remain unemployed. On the other hand, if the tax is high enough to keep out the goods, then there is no revenue from that source. There is no escape from this dilemma. Either the unemployed are not relieved from their workless situation, or there is no revenue from that tax.

What is “unfair” competition? Every manufacturer in this country will argue that all foreign competition is “unfair.” Those suffering from German competition will denounce the “low” wages of Germany as “unfair,” while others, beaten by the Americans, will vigorously denounce American “high” wages as “unfair.” So to meet their wishes “special assistance” will have to be given to all of them? This at least has the merit of simplicity.

On the other hand, “the greatest and most important of our national industries” is not to be protected by a tax !

Wonderful logic ! For, says the Government:—

  “It is not our intention, in any circumstances, to impose any duties on wheat, flour, oats, meat (including bacon and ham), cheese, butter or eggs.” (Ibid.)

However, to escape the awkward dilemma this declaration produces, the farmer of arable land is to receive a bounty of £1 per acre per annum, on the condition that he pays his “able-bodied” labourers—whatever they may be—at least 30s. a week. This £1 per acre is to come from the tax that won’t be raised by keeping out “manufactured” goods.

That section of the capitalists which desires a Tariff hopes, by keeping details secret till after the Election, to be returned to power, so that behind the Tariff—if it is effective— they may raise prices in the home market. The workers, who are constantly told that high prices are due to high wages, will then find that their low wages will form no effective barrier against prices going up, which may cause them to wonder which is which.

Mr. Churchill, in a speech at Manchester (18/11/1923) gave eight points of the Liberal programme as follows :—

  “Free Trade, the immediate reform of our electoral system on the lines of proportional representation, the strengthening and improvement of National Insurance, housing, land reform, agricultural reform and organisation, the development of the Empire, and, last but not least, peace abroad.”

He omitted the point of abuse which has filled so large a portion of the Liberal leaders speeches up to the present, or it may be that he considered his own efforts in this direction rendered any further emphasis unnecessary.

On the marvels wrought, and to be wrought, by Free Trade, one may quote from a famous epitaph and say “Look around.” If the present condition of things is the result of over 70 years of Free Trade it could hardly be surprising to find numbers of the workers turning to the equally fallacious nostrum of “Protection” in the hope that it may bring a better result.

And what a splendid remedy for unemployment is proportional representation. Think of the awful strain the brilliant brains of the Gallipoli gambler (in other men’s lives) must have undergone to have made this wonderful discovery ! Will not a strengthening of National Insurance provide the European markets with that purchasing power they so sadly lack to-day? Housing, land reform, agricultural reform—are not these promises at least as old—and as futile —as Free Trade? But then red herrings have to be very stale before they lose their scent. No doubt if returned to power the Liberals will develop the Empire—or promise to do so—before the winter is out. How that will settle unemployment we are not told. Peace abroad is certainly desirable, though how the Liberals will deal with their friends the French and the latter’s Monarchist intrigues in Central Europe, we are left to guess.

The Labour Party denounces the Government for their inadequate programme of winter work for the unemployed, and puts forward an elaborate list of proposals ranging from Electric Power Supply to Afforestation and Housing. But these things will cost money while the Labour Party promises relief for the Taxpayer, Is this a dilemma? Not at all. To pay for these schemes and relieve the taxpayer the Labour Party proposes to raise fresh taxes. Simplicity itself.

This Party had nearly succeeded in burying “The Capital Levy” when the Election was suddenly announced. The Capital Levy was hastily dug up again, but looked so shabby and mouldy that it was decided to dress it up in a new coat called “The Non-recurring graduated War Redemption Levy.”

If this title fails to sink it, the Levy will be laid on all individual fortunes in excess of £5,000. In its original form the amount of the fortune was lower than the sum above. But it was found that many of the Labour leaders’ war fortunes come within that zone, and so the amount had to be raised.

The superficial issues of this Election— Free Trade versus Ambiguous Protection —are of no interest to the working class. Whichever side wins they will still remain slave to the master class, because the private ownership of the means of life—the cause of the workers’ enslavement—will still continue. When the workers understand their slave position they will organise to contest an Election for the purpose of taking control of political power with the object of attaining their emancipation and establishing Socialism.

Letter: The Capital Levy (1923)

Letter to the Editors from the November 1923 issue of the Socialist Standard

To the Editor of the Socialist Standard.

Dear Sir,

With regard to the article on the Capital Levy, I would like you to answer the following questions :—

I agree that all taxes are paid by the rich, and come out of surplus value. The robber pays taxes with the wealth he has robbed. But if taxes go to pay for working-class education, old age pensions, etc., then it is the robbers who are made to pay for services rendered to the workers. So that taxation may be used as a lever by the workers to recover some of the wealth taken from them.

Now again, if the Capital Levy, instead of being used to relieve taxation, is used to pay for more and better social services—then the Capital Levy will help the workers.

It is surer to help the workers than higher wages, because the sliding scale—the fodder basis—neutralises higher wages; while social services cannot be neutralised so easily.

The Capital Levy can be used to pay for the land, and instruments of distribution and exchange socialised. To pay means with the money levied from the whole of the capitalist class—the only class that can be levied.

Thanking you,

Yours, etc.,

R. Nelt.

Reply to Mr. Nelt.

Mr. Nelt sets out to explain how taxation (or a special form of it, the Capital Levy) “may be used as a lever by the workers to recover some of the wealth taken from them.” He is, however, not logical in his argument. He says quite correctly that the capitalist class pay for education, old age pensions, etc. Then, without any explanation, he alters “pay” into “are made to pay.” The latter, if it were true, would support his argument, the former, which is true, does not. The capitalist class levy themselves to pay for social services, and being in control of the political machinery they decide the form and the amount of the taxation, and the objects to which the revenue shall be devoted. While the workers continue their present attitude of indifference and actual opposition to their own interests, the capitalists will have just that amount of freedom they now possess to order their affairs as they choose. They will tax themselves as they like, and spend their money on whatever object seems good to them. If the workers had the will and the power to destroy capitalism it would be silly to waste that power on the minor reforms Mr. Nelt proposes; while both will and power are lacking it is impossible to “make” the capitalists do even these small things.

Let me also remind Mr. Nelt that the primary object of the Levy, as advocated by Mr. Pethick Lawrence and the Labour Party generally, is not to increase, but to lower taxation. “It could not be justified except for the purpose of debt reduction.” (Mr. Snowden, Morning Post, 28th June, 1923.) Perhaps Mr. Nelt may imagine that after the advent of a Labour Government taxes really would be levied with the deliberate intention of plundering the capitalist on behalf of the workers. Mr. Snowden disposes of that also, and at the same time supports our view that the capitalist system will be as strong and as safe after a Labour victory as before.

  “If, of course, the commercial classes and those who would have to contribute to a Capital Levy will not have it, but prefer to go on paying a high income tax without any hope of any substantial reduction, they must bear it, and a Labour Government would have to look in other directions than the Capital Levy for revenue to enable the food taxes to be removed, the income tax on moderate incomes to be reduced and to finance schemes of social reform.”

It is obvious, too, that if capitalist opposition will be able to make the Labour Government give up the Capital Levy, the capitalist will then, as now, dictate their own programme of social reform.

Edgar Hardcastle

Letter: The Capital Levy (1923)

Letter to the Editors from the November 1923 issue of the Socialist Standard

To the Editor of the Socialist Standard.

Sir,

In response to your invitation to continue the discussion, it seems to me that there are three fundamental differences between us.

Firstly I hold that among the “economic forces” which under a capitalist system determine real net wages (i.e. the purchasing power of money wages) must be included the power exerted by capitalists through their possession of war loan. You apparently exclude this factor.

Secondly I hold that a levy on capital is a step towards ending the present system of wealth distribution which enables some individuals to live in idleness on the fruits of others’ exertions. You apparently think, either that it would not be a step at all, or that it would be so small as not to be worth taking.

Thirdly I envisage the capital levy as one of the several reforms which will not only improve the immediate position of the workers, but will at the same time help to build up the new order of society necessary to take the place of the decaying capitalist system. You, I gather, regard such efforts at best as futile, and at worst as buttressing up the capitalist system and delaying its overthrow.

If I have correctly stated our respective standpoints there is nothing further to be said.

Yours, etc.,

F. W. Pethick Lawrence.

Reply.

Mr. Pethick Lawrence says that “the power exerted by capitalists through their possession of war loan” is apparently excluded by me from the economic forces which determine real net wages. Now I readily agree that within the framework of the State, and subordinate to political control, which is the ultimate source of power, the accumulated wealth of the capitalists is an important factor in the struggle about the level of wages. But I do not see that it matters one jot whether that wealth exists as war loan, or whether it take some other form.

Lest it be said that this huge debt is the cause of present unemployment, let me recall two things : (1) that before the war we had some permanent unemployment, as well as protracted periods when it was acute; and (2) that France, with a like indebtedness, and a much worse financial position generally, has no unemployment.

If the Capital Levy meant a real appropriation of a large part of the wealth of the capitalists, there might be something in the argument, but in Mr. Pethick Lawrence’s own words, “Payment of the levy will, in effect, be carried out by means of a reshuffling of the title deed’s of wealth among-wealthy persons. …” (Forward, May 5th,. 1923).

This brings me to his second point. I still fail to see how this “reshuffling,” which leaves the total wealth of the capitalist class untouched, and merely changes the form of some of it from war loan to industrial capital, can at the same time be a step towards the ending of the present system of wealth distribution. If the capitalists lose nothing, from what source do the workers, gain ?

As for the last point, Mr. Pethick Lawrence has not yet answered the charge that the levy, if successful, would buttress up the capitalist system. Assuming that a capitalist state were in dire need of some measure to re-establish its financial stability, then it seems obvious to me that a capital levy which served this purpose would strengthen the hands of the capitalist class, and give new life to the system on whose continuance their privileged position depends.

Actually I think that it is unlikely that the British capitalists can now have any use for the levy. At the time, just after the war, when it might have proved very useful to them, they were not ready to accept it, and now the need has largely passed.

Edgar Hardcastle

Letter: The Capital Levy. (1923)

Letter to the Editors from the October 1923 issue of the Socialist Standard

To the Editor of the Socialist Standard.

Sir,

In your issue of August last you express your opposition to the Capital Levy and to my line of reasoning in defence of it. With your permission I propose to answer your criticism, and will be as brief as I can.

To begin with, let us see how far we are in accord. Firstly, I agree that “a small class does own the bulk of the means of producing wealth in this and other capitalist countries.” In my book on “The Capital Levy” I have demonstrated this (for Britain) by overwhelming figures.

Secondly, I agree that this small capitalist class in the main controls to-day the political machine. Thirdly, I agree that capitalists pay wages not because they are philanthropists, but because they are compelled by economic forces. Finally, I agree that the system of capitalism has many inherent evils and that there is no way out except by Socialism.

I do not agree with you however either (1) that under capitalism the workers as a whole have no “surplus over their minimum needs,” or (2) that under Socialism the burden of the National Debt will be automatically lifted.

With regard to (1), you yourself in another part of your article recognise that wages must be “broadly regarded” as based for “different section of workers under different climatic conditions, and with different social standards and different lines of historical development on their standard of living.” This is surely a much more elastic view than is implied by the words “minimum needs.” But, even so, I cannot admit your case. What I will admit is that standard of living and weekly wages are intimately connected. Take two men—a skilled mechanic earning £4 and a labourer earning £2 10s. The family of the former have a standard of living at the £4 rate, while that of the latter live at the £2 10s. rate. I suggest it is much nearer the truth to say that the standard of living depends on the wages, than that the wages depend on the standard of living.

If you ask me, “On what then do wages depend?” I will answer in your own words, “on the economic forces,” and these economic forces include such complex questions as the amount of unemployment, the state of trade, foreign competition, world prices, and so on.

Of course, this distinction between us is vital, for if once it is recognised (as I hold) that wages depend on something other than an automatically-assessed standard of living, then the worker is vitally interested in the lightening of the load of taxation, and stands to gain by a Capital Levy, which will enable taxes on tea, coffee, cocoa, sugar, etc., to be taken off, and that on tobacco reduced. If, on the other hand, you are right, it would make no difference to the workers if the income tax, super tax, death duties, etc., were done away with, and all the revenue were collected from beer, tobacco, tea and the food of the workers. I would remind you that the apologists for the old French Aristocracy took this view in the middle of the eighteenth century and that the revolution followed.

Turning now to the other principal difference between us, I submit that even under Socialism there will be many important problems to be solved. I would remind you that Socialism does not imply the equal subdivision of all wealth, nor the collective ownership of all wealth. But unless Socialists are prepared to tackle the grave evil of maldistribution they will seriously disappoint their supporters. The first step in this direction is to get rid of the National Debt by placing it on the holders of the existing wealth of the country ; and I submit that this step if not already taken during the establishment of Socialism would certainly have to be taken immediately afterwards.

I should exceed the space you can afford me if I were to attempt to answer all the minor points you have raised, but as these two major differences go to the root of the whole matter they will probably suffice.

Yours, etc.,

F. W. Pethick Lawrence.

Reply.

I must first point out that I did not say that the workers have “no surplus over their minimum needs,” although, as a matter of fact, few of them indeed are able to accumulate any property worth mentioning. What I did was to take two alternatives—”the workers either receive a surplus … or they do not “—and to try to show that, whichever be correct, taxation could not affect them as a class. It was not necessary to say which is correct, and I did not do so, as without further explanation of “minimum needs” such an assertion would be misleading.

The assertion I did make was that referred to by Mr. Pethick Lawrence as “a more elastic view,” and I hoped when I wrote it that I had make it quite clear that the workers’ standard of living is not in my opinion “an automatically-assessed standard of living,” but is “elastic.” It is the resultant of a number of factors which change continuously, and moreover which include the workers’ political knowledge, assertiveness, and mental independence.

I need not labour this further or deal with Mr. Lawrence’s discussion of the relation of wages and the standard ol living, because I think he has not gone to the root of our disagreement. I will therefore restate my view.

The standard of living is not measured simply by the amount of money wages received. It consists of the amount of real wealth, food, clothing’ and shelter, etc., finally consumed by the working class. The relation this amount bears to the whole product of the labour of the workers depends at any given time on the interaction of the “economic forces.” The capitalists, who are the legal owners of the whole, give to the workers just as much as they are compelled to give. Now, unless the Capital Levy disturbs this equilibrium of forces in the workers’ favour, their standard of living will not be improved. Or, as I put it in my article, “Would the capitalists, if there were no taxation at all, give the workers a larger share of the wealth produced, and if so, why?” This basic question has not been answered.

To say that some workers or all workers receive £4 and have to return £1 as taxes, only means that at the given moment £3, and not £4, is the money value of the standard of living produced by the existing forces. If that were not so, the workers would be able to demand and to get an increase of, say, £1 per week. Their ability to make such demands is limited always by the control the capitalists have over the key position, the political machinery.

Of course, Socialist Society will have its own problems to solve, but the National Debt will not be one of them. We are some of those rare people who, in spite of calling themselves Socialists, actually desire Socialism. Under Socialism—that is, a “system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth”—there will be no room for individuals to live by their ownership of some of society’s resources. We do not aim at the “equal” (or unequal) “subdivision” of anything; nor would we be so foolish as to advocate the “collective ownership of all wealth.” Wealth, as distinct from the means of producing wealth, does not permit of being collectively owned.

In view of Mr. Pethick Lawrence’s subsequent remarks, I must dissent from his opinion that he and I are agreed that, “there is no way out except by Socialism.” To me his “way out” seems to be merely a way cut into the wilderness. The Capital Levy is not Socialism ; it does not lead to Socialism ; and it still remains to be shown how its introduction would in any way better the position of the working class within the capitalist system.

Edgar Hardcastle.

[Mr. Lawrence can, if he wishes, have space to explain further his position and to deal with the points raised in the reply.]

The Capital Levy. (1923)

From the August 1923 issue of the Socialist Standard

The recent war caused an enormous increase in the National debts of most of the belligerent nations, and the burden of finding interest has helped to popularise an old bogey, trotted forward in a new disguise as the Capital Levy. It has been made one of the main planks in the Labour Party’s programme, and was presented in various lights and with varying degrees of warmth by Labour men at the General Election. In the main, it seems to have been useful to that party as a rallying cry for the more aggressive of the industrial workers; and in quarters where the votes were sought of the mentally more slavish section, which goes by the misleading name of the middle class, the local members did their best to explain that the levy really didn’t mean much. Most opponents relied chiefly upon the iniquity of robbing the capitalist of his savings, etc.

We, however, are not concerned with this purely superficial attitude towards the proposal. As Socialists, we are bent on discovering by what means the position of our class may be advanced. Our class consists of all those people who, not being owners of property, must sell their mental and physical energies to those who are owners. This proposal must stand the general test—Is it or is it not one which is useful to the workers?

In the “Forward” (Saturday, May 5th, 1923), Mr. F. W. Pethick Lawrence, a Labour candidate and prominent advocate, sets out what he calls “The Case for the Capital Levy,” with the sub-title, “Lift the Burden of Debt from Industry and Labour.”

Now, we are agreed that there is a burden ; and, further, that people who have burdens are naturally interested in having them lifted; but Mr. Lawrence makes the somewhat important omission of not troubling to prove that the debt is a burden on the workers. If it isn’t, why should the workers trouble to lift the burdens of the capitalist class? And, on the other hand, what are we to think of an organisation which asks them to do so?

Let us consider the matter in an elementary way. First, can Mr. Lawrence deny that a small class does own the bulk of the means of producing wealth in this and other capitalist countries? This is a matter of common knowledge, for which it is not necessary to quote statistics.

Owning the means, the capitalist class also own the products. If you are a boot operative, you know that all the boots, when they are finished, belong to your employer ; and so throughout the productive system in which we live. As a worker you receive wages or salary at certain intervals, the length of which is immaterial. Your wages are drawn from the store of wealth produced by you, but owned by your employer. The reason he gives you something he would willingly keep, is surely not that he loves you. It is a simple necessity that you must have the means of obtaining food, clothing, and shelter, recreation, etc., in order that you may continue alive and in a state of sufficient fitness.

Then, what is it that determines for the workers as a whole the amount given in return for services rendered? We contend that, broadly regarded, that amount is based for different sections of workers, under different climatic conditions and with different social standards and different lines of historical development, on their standard of living. This may change, and in an immediate sense it fluctuates up or down according as there is a comparatively large or small supply of labour, and according to the degree and method of organisation. Generally, however, the capitalist class must pay away so much wealth for the upkeep of the wealth producers, and the surplus is theirs.

But the matter doesn’t end there. The same class also controls the political machinery, the Government, in all these capitalist countries. It must control politically in order to safeguard its private ownership. But the great and growing State services cannot be run for nothing. The capitalists must dip into their surplus to find the necessary cash—a proceeding to which they all object very strongly.

Needless to say, sections among the owning class are always willing to hand over their share of the burden to their weaker brethren. Now, the top capitalist dogs and the weaker brethren are all alike dependent on the votes of the workers. Without your support they can do nothing.

And this is where we return to our Mr. Pethick Lawrence.

If the burden rested on the backs of the workers it might be worth while trying to throw it off. But if the workers have no surplus, then they cannot be robbed of what they don’t possess; and, in spite of apparent objections, the workers as a whole do not suffer from high, nor benefit from low taxation. They suffer because they are robbed, and they are robbed whether taxes are high or low, and the degree of the robbery has, over a period, no direct or indirect relation to taxation. As we have seen, the workers receive all the wealth they possess from the capitalist owners, and, further, these owners control at present the machinery by means of which taxes are levied.

Now, the workers either receive a surplus over their minimum needs or they do not. If they don’t, then they cannot be robbed of that non-existent surplus afterwards. If they do, then the capitalists will have given the surplus either because they are philanthropists or because they are compelled by economic forces. If they are philanthropists, then they will not take back the gift they gave; and if they were compelled to give, then the same forces will prevent them from taking it back.

The burden of taxation for the payment of interest or the National Debt is Not a burden on the workers.

But, say these levy advocates, food prices will be lowered. Possibly this is true, but are you certain you will benefit? Is a railwayman, for instance, worse off on 60s. when it costs 60s. to live, than on 30s. when it costs 30s. to live? And although all workers’ wages do not vary automatically on a sliding-scale basis, is there any grade or industry in which wages are not very closely dependent on the general level of prices?

Mr. Lawrence, with unconscious humour, writes: “The workers out of their poverty are paying for all their old-age pensions, all the soldiers’ and widows’ pensions, the State’s contribution to Health and Unemployment Insurance, etc., etc.”

The pertinent question Lawrence might answer is this : Would the capitalists, if there were no taxation at all, give the workers a larger share of the wealth produced, and, if so, why?

Mr. Lawrence says : “The main principle of the levy is simplicity itself. It is to pay off debt out of wealth. The wealth of the country as a whole is the wealth of its citizens.” This, as I have already explained, is quite untrue. The wealth of the country as a whole is the private property of the capitalist class. Only the owners of property can suffer the burden of taxation, and only the owners do suffer. Some of them want you, the propertyless workers, to pull their chestnuts out of the fire, and Mr. Lawrence and the Labour Party are making a bid for office on the strength of offering to do the necessary publicity work.

Mr. Lawrence admits our charge in full. He writes, “Payment of the levy will, in effect, be carried out by means of a reshuffling of the title-deeds of wealth among wealthy persons, and the actual cancellation of a large amount of war debt.”

This is of vital concern to those who hope to get some good cards out of the re-shuffle, but does it matter the least little bit to us whether Mr. Capitalist A. or Mr. Capitalist B. gets the aces? Perhaps Mr. Lawrence and a few others may be suitably rewarded; and perhaps not, for the master class are notoriously ungrateful where there are so many willing servants.

The fact of the matter is that the capital levy, like any other mere juggling with figures, will not alter the amount of real wealth, land, factories, railways, etc. ; it will not alter the worker’s position in relation to the owners, and, finally, it will not affect the capitalist class except to the extent that it leads to some redistribution of wealth among themselves.

While the capitalists will on the one hand be relieved from the burden of paying the debt interest, they will also, on the other hand, be deprived of the present means of paying that interest. Some will gain by reduced taxation what others lose by the paying off by the State of their quota of the debt and their consequent loss of interest on their bonds. The money paid out will, in its turn, be reinvested in industry, and we shall be as we were.

Funnily enough, while the Labour Party wants the Capital Levy in order to stop paying “a vast tribute to the nation’s bond¬holders” (Mr. Lawrence), this same Labour Party wants to create more bondholders to “draw vast tribute” by nationalising the land and compensating the present owners with 5 per cent. bonds redeemable in 30 years (Mr. Snowden’s Land Nationalisation Bill now before the House).

The National Debt, too, was produced by wars, chiefly the last war. The Labour Party opposed that one up to the 30th July, 1914, and then vigorously supported it until such time as the capitalists thought it wise to call a halt in 1918. The apologists assure us that next time the Labour Party will act differently, and in conference they carried unanimously a resolution “calling upon the Government to summon an International Conference, and propose thereat immediate and universal disarmament” (Daily Herald, 29th June). It was then moved that “The Labour Party in Parliament should vote against all military and naval estimates,” and surely a No-More-War Party could do no less. But, as Mr. Henderson pointed out, “It was absurd . . . we could not do without a Navy. If France continued in her present frame of mind, were we to neglect the possibilities of defence?” Mr. Brownlie (A.E.U.) thought it might “embarrass candidates at a future election,” and it would throw out of work his members engaged on building battleships !

So it seems that all Mr. Lawrence’s work trying to wipe out the last war’s debts is going to be rendered vain by Mr. Henderson’s next war. Incidentally, how could Mr. Henderson advocate the use of the armed forces against strikers if there were no armed forces?

After wiping out this war debt Mr. Lawrence says “there will probably be a balance of over £100,000,000 a year on the right side,” and then he adds, “Great things can be done with this sum.” Glorious ! But who is going to decide what “great things” are to be done? Surely the owners ; and the capitalists don’t voluntarily do great things for the workers. On the other hand, if the workers are of a mind to do so, great things, even greater things, might be done now.

And the workers would stand a better chance of making up their minds if shoddy economists like Mr. Lawrence ceased propagating among them quack nostrums conceived for the salvation of the small fry of the capitalist class. The levy is not to affect owners of £5,000 or less.

Lawrence is aware that “some Socialists contend that it (the Capital Levy) is not Socialism, but only a palliative to buttress up the capitalist system,” and he agrees that “it will leave heaps of evils untouched, and it will not take the place of the Socialist remedy for the reconstruction of society.” He carefully omits to answer the charge that it will bolster up capitalism, and makes the lame excuse that in meeting “the one purpose for which it is designed, viz., that of cancelling a great part of the debt,” it will also remove “some of the worst evils of the present maldistribution of wealth.” He does not say it will remedy the maldistribution, and war could equally be commended, on the same ground as the policy of battleship building, i.e., that it removes unemployment. Lawrence doesn’t even say what those evils are which the Levy will remove.

In short, as cannot be too often repeated, the workers are poor because they arc robbed. They are robbed just the same, high taxes or low taxes or no taxes ; big National Debt or no National Debt; great foreign trade or no foreign trade. At present the workers are often worse off when unemployment is widespread than when trade is booming, but is this not simply because they accept the position? However bad trade depressions may be, do the capitalists go without, and, if not, why not?

While there is wealth in existence not being used to maintain the workers who produced it, those people are deliberately or unwittingly playing the capitalist game, who talk about measures to revive “our trade,” whether they be Labour, Liberal, or Communists.

We are Socialists, and do not ask you to seek salvation by reviving capitalist trade. We tell you there is only one solution to your problems.

Lawrence says there are four alternatives before you :—

1. Repudiation.
2. Inflation.
3. A Sinking Fund.
4. Capital Levy.

We say that each and every one of these is a question of no interest or use whatever to the workers. We add a fifth alternative—SOCIALISM. This is the only remedy for present or future working-class ills, and one that can be applied as soon as the workers choose to apply it.

Edgar Hardcastle

Financial Fog. (1924)

Pamphlet Review from the February 1924 issue of the Socialist Standard

I have read this pamphlet with ordinary care, but I have not the least idea what Mr. Neft is driving at. The 48 pages would be heavy at 6d., even if they contained something of value, but they are in fact full of contradictions, unsupported assertions, pious hopes, and ill-chosen quotations.

The actual proposal before the workers is the Labour Party’s scheme for halving the National Debt and reducing taxation. Mr. Neft’s main argument is this. High taxation is good for the workers; therefore, vote for the Labour Party and low taxation!

He proves quite neatly on page 43 that all taxes are paid by the capitalist class. This is, however, only a tribute to his own powers of persuasion, for when he wrote page 20 he was of quite another mind. He there says that during the war capitalist governments borrowed money for war expenditure instead of raising it by taxation, because “Only the few can lend, but ALL can be taxed,” and thus the Government “made the Many pay interest to the Few” (capitals by Mr. Neft).

He has made several startling discoveries. One is that the capitalist class live by owning all the means of wealth production, land factories, railways, etc., and “In addition, they claim £7,000,000,000 from the rest of the community ” (page 28).

He knows that there is a robber class and a robbed class, but he has found a third class, the “middle class.” These unfortunate people, who it seems neither work nor live on the labour of others, must live on their own backs by robbing themselves.

I cannot tell whether Mr. Neft wants us to think that he is a socialist or whether he wants us to be most impressed by the prominently displayed support for the levy from W. L. Hitchins, chairman of Cammell, Laird & Co.

It is certainly interesting to learn that the levy is going to benefit everybody, and that

  “As every penny taken from them as levy will be returned to them in payment of their war loans the rich will actually lose nothing ” (page 21).

With this “nothing” taken from the rich, Mr. Neft is going to pay for “an increased and improved social service, and never mind the cost” (page 44).

He calls capitalism a “social disease,” but wants the capitalists to be compensated. Still, I am not worrying, because the compensation is to come out of whatever balance is left after the “nothing” mentioned above has been used to pay for those increased social services.

It appears not to have occurred to Mr. Neft that if capitalism is a social disease it would be advisable to abolish it. He has a simple and original remedy. The capitalist class pay all the taxes; therefore, the workers should aim at becoming burdens on the taxes and thus win back some of the surplus value stolen from them in production. Mr. Neft omitted to draw specific attention to the permanent paupers who have won through to this desirable state of things. Everyone knows what a fine, prosperous, independent, intelligent and morally admirable crowd they are. A moment’s thought will show that if the capitalists could get what Mr. Neft wants them to have, it would be the finest thing that ever happened—for them.

He tells us on page 40 that “The levy can reduce taxation. . . . It can, therefore, reduce the price of commodities. “That is evident,” but that as wages will fall correspondingly, the workers will not gain anything.

Then on page 44 we learn that remission of taxes is useless, because “You can take a penny off the worker’s beer, but as soon as the tea-thief smells that penny he puts the price of his commodity up and gets the penny that the beer-thief has relinquished.”

Thus we have (1) the beer-thief voluntarily, and out of kindness of heart, reducing the price of beer by the amount of the remitted tax; (2) wages falling; (3) wages not falling; (4) the tea-thief being less kindly than the beer-thief, and putting up the price of tea; (5) the tea-thief robbing the worker of the surplus which has already been taken by the wage reduction which has both taken place and not taken place, etc.

There are two things Mr. Neft might have said but didn’t. One is that as on his own showing the capitalist class will still own the means of production after the levy, it does not matter a twopenny damn or a sixpenny pamphlet whether the capitalists have a levy or not.

The second is that the capitalist system is the evil and should be abolished.

There is also a question he might have answered. During the war when the Labour leaders were trying to prevent the workers from taking advantage of the labour shortage to get wage increases it was an article of faith with them (although fallacious) that the capitalist could always pass such burdens on to the consumer. What is to prevent them from doing this with the capital levy? If they can do so and also get it back “in payment of their war loans” as Mr. Neft promises, it looks as if they will be “ quids in.”

Edgar Hardcastle