The Common Market Special Survey: 2. The Industrial Power (1962)

From the January 1962 issue of the Socialist Standard

An investment of £2,000 million was the figure recently suggested as necessary for the setting up of an international scientific research centre in Berlin. In the same newspaper the British Electricity Council announced its intention to spend £947 million on generating stations in the next four years. The British Motor Corporation spent £10 million in launching one model—the Austin 7/Miniminor.

In themselves, these three examples have no direct connection with the emergence of the “Common Market.” They are, however, pointers to the scale of modern capitalism. Huge investment and massive production plants are the order of the day. A small sheet steel mill would be economically and technically ridiculous in 1962. Modern plastics, too, such as polythene or nylon, must be produced in vast automatic plants. It is the same story with petrol refining, aircraft production, coal mining, chemicals, shipbuilding, rocket research, and so on; and this matter of size is the real force that has brought the European Economic Community into existence.

E.E.C. is a perfect demonstration of Marx’s statement that capitalism is neither a stable nor a permanent social system. It is driven to expand under the compulsion of inexorable economic laws, gearing up science and engineering to the ever-increasing demands of capital, and forcing human and social relationships into new and arbitrary patterns.

In Europe, particularly, the pressure on national boundaries and sovereignties has been intensifying since the first World War, when Europe started to fall behind America in the race for industrial production and exports. The retention of national units seriously weakened the European capitalists in their struggle for a share of the world’s trade; and since the second World War, which can be seen from one point of view as a German attempt to unite Europe under its rule, it has become obvious that, individually, the European nations are puny and backward by comparison with the American and Russian federations.

E.E.C. is, in fact, very far from being a “good idea ” formulated by European politicians; it is a belated and reluctant acknowledgment of the expanding scale of investment, production and trade.

Steel

Significantly, the first step in the industrial unification of Europe was the setting up of the European Coal and Steel Community in 1952. Coal is still by far the most important industrial fuel, and steel the overwhelmingly dominant metal. Furthermore, the holdings in both industries were already concentrated in a few large blocks, making negotiations relatively simple.

The occupying Allies had limited German steel output to 11m. tons a year. When the restriction was lifted, W. German production rose rapidly to reach 34m. tons in 1960, bringing the total for the Community to 73m. tons. Their exports are co-ordinated in a cartel known as the Brussels Entente handling two-thirds of the world’s steel exports— formidable competition for the British Steel Federation!

Nevertheless, in these boom years for steel, British exports have doubled in the past ten years, and the industry has gone ahead with large development plans at Corby and Margam and Llanwern. A large fraction of this increased capacity is for sheet steel in anticipation of a continued increase in demand from the motor industry. These “strip” mills are barely an economic proposition at under a capacity of a million tons a year. Building a new one is therefore a big step, but unless it strides at this rate the British industry must fall out of the race. The real testing time will come when the boom is over. Then the weight of the Brussels Entente will be decisive.

Unless the British Iron and Steel Federation can break into the European group it can be out-produced and out-priced. Even if it does, the proposed merger between Phoenix and Thyssen in Germany would dominate the group. Indeed, the British steel industry might even be prepared to submit to re-nationalisation in order to wield sufficient power.

Coal

It is a starker version of the same picture with regard to the older and less efficient coal industry. Already a number of Belgian coal mines have been closed down as being uneconomic in competition with German coal. In this country the average rate of profit from coal mining was so low that there was never any real alternative to nationalisation. The National Coal Board, like the true capitalist concern that it is, is to close 15 Scottish pits, involving 5,000 men, next year as part of the attempt to wipe out its £21 million deficit for 1960. It has closed a large number of pits which are unprofitable by modern standards, and the total deficit for Scottish mines is now estimated to have reached £100 million. Contrary to popular belief, the Coal Board does not exist to produce coal, but to produce profits; and so it must cut its losses.

It must do more than this: until now it has been protected from serious foreign competition (even the Steel Company of Wales was prevented from importing cheap American coal); it must reverse the steady shrinkage of exports if it is to survive. They dropped from £61 million in 1950 to £28 million in 1960, largely through uncompetitive prices. By cutting the labour force (by 20,000 in 1961) and by a costly programme of capital investment (£97 million in 1961-2) productivity has been raised from 3-2 tons per manshift in 1950 to over 4-1 tons last year. The National Coal Board claims that it is introducing automatic machinery faster than is being done anywhere else in the world, and that real automation, in the form of robot coal-cutting machinery which seeks out the coal for itself, will be operating in a British mine before the end of 1962. In a Commons debate on the coal industry on October 24th, 1961, the Minister of Power, Mr. Wood, said that: “It was too early for him to forecast the precise effect of membership of the Iron and Steel Community, but it was felt that it would benefit both the NCB and the consumer. This would automatically confer benefit to those working in the industry.” (The Guardian, 25/10/61.)

The attitude of British coal miners towards this statement is not easily available; but, since their numbers have dropped from over 1,000,000 in the 1920’s to 560,000 in 1961, it is doubtful whether they feel so optimistic about Britain’s entry into the “Common Market,” because, whatever else it involves, it certainly means more ruthless exploitation of every man.

Gas

On November 7th, 1961, the Financial Times published a four-page supplement on the Gas Industry, showing that like the National Coal Board its production and sales had risen while its labour force had been cut by 20,000 in ten years. The Chairman of the Gas Council, Sir Henry Jones, wrote of “gas established again as a growth industry” in spite of the fact that the number of gasworks has been cut from 1,050 in 1949 to 378. During this period gas production has remained fairly constant at about 2,200 million therms per annum, which means that the whole industry has been made considerably more profitable under nationalisation.

The fact is that many new possibilities have opened up for the gas industry in recent years. It has maintained its strong links with the coal industry, especially with the introduction of the Lurgi process of complete gasification of coal without leaving coke. In addition, however, it is becoming more and more tightly wedded to the oil companies. Apart from the gasification of heavy fuel oil, such as is being carried out by the South Eastern Gas Board at the Isle of Grain works, American oil companies are offering shipments of cheap liquified petroleum gas and of naptha. The British Gas industry, however, has at present concentrated on its decision to import shipments of natural methane from the Sahara. This touches the question of E.E.C. very closely because the French are reported to be undertaking the construction of a pipeline from Algeria across the Mediterranean to provide gas for a grid-system throughout the E.E.C.

For the British industry one of the main advantages of being linked to such a system would be the ironing out of fluctuations in demand during the day and, to some extent, during the year. France and Germany already have large underground storage facilities for manufactured gas so that summer production may be saved for heavy winter consumption. In one way or another it looks as though the capital invested in the British gas industry could show considerably greater profit and expansion by being linked with Europe.

Electricity

The British Electricity Authority is the most profitable of all the nationalised industries, having made a gross profit of £18 million in 1960-61; but there is further profit to be made by linking itself with the continent to meet future increased demand.

Apart from its own considerable expansion and storage schemes, the Annual Report of the Electricity Council mentioned the fact that “. . . the cross-channel link with Electricité de France would be coming into commission soon. Because of the difference in the incidence of peak demand in the two countries, 160MW of load could be transferred in either direction with savings to both parties.” This is an arrangement which has been carried through independently of negotiations among politicians about E.E.C. and demonstrates that, however British hearts may feel about loss of national sovereignty and all that, the industrial ties with Europe are strengthening every day.

Ample proof of this last point is given in a report from Turin by Gordon Wilkins in The Observer, November 5th, 1961:

“More British cars may have Italian built bodies as a result of discussions held here this week. One leading British body designer told me it may even prove economical to import Italian-made bodyshells into England, especially if Britain joins the Common Market . . . Pininfarina are making the convertible bodies for the new French Peugeot 404. Bertone are sending coupe bodies to Germany for N.S.U. and B.M.W. Vignale, who have been building a Triumph TR3 body for the Italian market, are planning a TR4 coupe for export. The agreement between Rootes and Carrozzeria Touring for assembly of their cars in Italy may be the forerunner of others. . . . Ghia are doing bodies for the Austin-Healey Sprite, and the latest registration figures show how much the British Motor Corporation have gained by having the A40 built under licence by Innocenti.”

In the same way, Alfa Romeo build the Renault Dauphine under licence, while “Italy’s enormous Fiat interests have car-assembly plants in Belgium and Germany, and expansion plans amounting to hundreds of millions of pounds will put them in all six nations” (Readers’ Digest, July, 1961).

In the metal-using industries motor car manufacture today makes by far the greatest use of mass production and costly automation. It is true that a few small specialist firms still persist among the giants; but million-pound firms like Standard have been shown to be too small to remain independent in the mass market amongst the large federations. Their average rate of profit is too low. Only ruthless standardisation and wider and wider markets can make profitable the immense outlay of constant capital. Now, in Europe national tariffs are preventing the giants from coming properly to grips with one another, as they must, for the dividing up of the market; and so they add their weight to the breaking down of these barriers.

A Crisis

Commentators on the emergence of E.E.C. have said repeatedly that industrial companies will have to “think big” to meet the new situation. Like most of the talk in the press and broadcasting, this masks the real picture. They imply that E.E.C. offers new opportunities for expansion. The truth is much more sombre. Certainly, the Common Market began while Europe was still booming; but if there had been unlimited markets for all there would have been no need for a Common Market.

The truth is that the average rate of profit has been steadily falling, owing to the enormous rate of capital accumulation (these huge investments in production plants that have been mentioned); and the European Common Market is not a fraternal gathering but a battle ground. The survivors in this new phase of European capitalism, therefore, will be the ones who are already big.

In the fields dealt with, however—coal, steel, gas, electricity and motor cars— the majority of small competitors have already been ousted in each European country: they are not available to be sacrificed when the competition becomes merciless. As early as October, 1961, the Daily Express, which has always put out propaganda for Empire and against Britain’s overtures to E.E.C., began to make great play of the fact that the current boom in Europe was falling off, insisting that therefore Britain should not join.

But these are precisely the conditions under which Britain will be forced to join, in order to give its giant capitalist undertakings chance to survive by overpowering weaker giants in Europe. Of course, there is no certainty that British capital will come out of it less bruised than its competitors, and this is the reason for all the uncertainty and haggling. The greatest giants of all, the major oil companies and the largest of the steel and chemical firms, can only gain in the long run. But, of course, they are already international organisations. The emergence of the European Economic Community is the political admission of the economic fact that a sufficiently great change in quantity has become a change in quality.

The icy winds of competition occasionally referred to are spoken of lustily as though they are to be a tonic for our health. Members of the working class hearing such windy talk on television ”reports” may even be persuaded that it will be a ”good thing” if some of the industrial “inefficiency” is to be “weeded out.” They can only be thus tempted into forgetting their own position as workers as long as they persist in believing that all this production is carried on in capitalism for the purpose of supplying people’s needs.

The Socialist knows that it is not so. He also knows that whichever capitalists turn out to be the winners in the growing struggle, workers can only expect to suffer in the upheaval and to be more thoroughly exploited in the future, whether they call themselves Britons or “Europeans.”

S. Stafford

Editorial: The Myth of Planning (1957)

Editorial from the February 1957 issue of the Socialist Standard

When the world has taken the great forward step of establishing Socialism production will, of course, be planned so that there will at all times be enough basic materials, finished products, and transport and other services, etc., to meet the requirements of the population. The chief aim will be to have enough to satisfy all needs after making allowance for growing population and for all possible wastage and destruction through storm, fire, and other eventualities. But it will not matter greatly if too much is produced because nobody will be dependent on paid employment for his living and therefore nobody will lose anything by finding that the articles he works to produce have been produced in too great abundance. Men and women will be be rather complacent about producing too much and only worried if they should err by producing too little.

Too Much or Too Little

Notice how this differs from the kind of planning that goes on in the world of manufacture today. Now the business man would be quite unruffled if he had planned the output of his factory so that it turned out to be rather less than demand, but he would be very worried indeed if his output was too large for the market for that would mean falling prices and smaller profits.

Planning versus Forecasting

We are, however, dealing with two different operations, for the kind of planning of production that will be possible under Socialism is quite unlike the market forecasting that goes on now. The one is concerned with determining how much you need and then getting things organised so that you will have that amount produced in good time. But present day forecasting of demand starts at the other end and is really much nearer to guesswork.

It requires that the manufacturer shall form an opinion about what kind of product will be a saleable one, two, five or ten years ahead and how much of it will in fact be sold and at what price. Of course the length of time varies according to the nature of the product. Christmas Cards are designed and planned something more than a year ahead and women’s dresses and hats something less than a year. Planning and sinking coal mines may take several years, as also does the planning and construction of an oil refinery. In all these instances market conditions at the end of the period may be quite different from those the planner thought they would be. He may find his anticipated sales of summer dresses and hats ruined by an English “summer,” or that the market for coal or oil has suddenly grown or suddenly shrunk.

Forecasting for 1960-1970

Information was given in a Financial Times supplement on the Motor Industry, about the problems of forecasting future sales of motor cars (15 October, 1956, p. 7). The head of the Sales Analysis Department of the Ford Motor Company, Mr. K. D. Bull, explained that companies in the motor industry undertake two types of forecasting:

“The first covers the short-term period up to and including the next 12 months and is used for production planning. The second covers a longer period and is used for much wider purposes. This latter type of study is undertaken not as an interesting academic exercise, but as a necessary concomitant of future planning; The time taken for the installation of new facilities, and in the processing of new models from conception to production, means that the investment involved can only be justified in terms of the sales to be expected over the period of their employment, which may be some years ahead.”

Mr. Bull went on to explain that this second type of forecasting deals with the period which “does not start for two or three years hence and covers generally the ensuing ten years. In using this forecast we pay little attention to the results for individual years, accepting only that these give a reasonably accurate measure of the market in the average.’’

This period of three to ten years means that in 1957 they would be trying to figure out what average conditions will be between 1960 to 1970 and it is not at all surprising therefore that they do not attempt to forecast what is likely to be the state of the market in individual years within the 10 year period.

Mr. Bull says too that past efforts to forecast the long term demand for motor cars have all underestimated the size of the demand that actually came.

Where Labour Party Planners Go Wrong

The Labour Party (and the Communists), are believers in what they call planning, but the trouble with it is that it is out of its time. They are trying to apply planning of production to Capitalism, but what Capitalism requires is not the planning of production but the forecasting of demand in the market—a very different thing. So far as this near-guesswork about sales is possible at all, the manufacturers can do it as well (or as ill) as anyone else; certainly better than a Labour Party Committee, or a Labour Cabinet. The real planning of production is not. required under Capitalism and will only be possible under Socialism.

So They Say: Protests too much (1977)

The So They Say Column from the December 1977 issue of the Socialist Standard

Protests too much

An article in The Spectator of 12th November entitled “The irrelevance of class” which attempts to justify its title by showing how various important men have risen from what are discreetly referred to as “humble births”, reminds us that the class war still prompts professional hacks (and quacks) to issue it, at regular intervals with a formal death certificate. The entire irrelevance of class structure within society led the writer of the article to over 50 column-inches to make his point and if The Spectator is prepared to pay for and publish this sort of thing, we have high hopes for our own submission entitled “The irrelevance of air—hot and cold.”

The inconvenient obstacle to the claim however is one of fact. Obstacles of this nature may or may not impress Spectator’s writers who are prepared to spend a good deal of time apparently in dealing with what they consider “irrelevances”, but it cannot seriously be denied that capitalist society is divided, on the one hand into those who own and control the means of life and on the other, into those who must work for a member of the owning class in order to live. If this class division were non-existent, or irrelevant, we could only express surprise at the great deal of verbiage mustered to assure us of the claim.

Not cricket

Although the owning class as a whole have class interests in common, namely the retention of private- property society and they will unite on issues which may threaten this, each member also has individual interests in the day-to-day business of increasing their particular share of the social wealth, and this process obliges them to enter into battles among themselves. Whereas the working class, the non-owners, represent a class enemy to be held off by a variety of means, other members of the capitalist class are rivals and as such require direct attention.

Fresh diplomatic protests have been tendered by the Government over breaches in agreements by Japanese (Motor) manufacturers to hold down sales in Britain.

(Daily Telegraph, 10th November 77)

The British motor manufacturers claim that the Japanese are carrying out an “invasion” of the British markets contrary to an undertaking given by the Japanese to restrain sales to the UK. It all sounds very reasonable—an arrangement between friends. The Japanese motor men have argued before that it had all been a misunderstanding and they may well do so again. The fact that the British government now argues the case on behalf of its own national manufacturers shows that they are not deceived. Both parties are aware that “undertakings” are weak restraints on the pressures of capitalist expansion.

Making the point, in the same newspaper, was the Chairman of the Welsh council of the CBI who advises his members that British manufacturers can satisfactorily meet Japanese competition by putting in “the same intensity of effort as the Japanese”, by which he means a greater degree of exploitation of the British working class. This gentleman was speaking from experience. He is the chairman of a machine-tool company.

Last year I put one Japanese firm out of business and two other Japanese firms have given up their markets to me.

(Daily Telegraph, 10th November 77)

It seems probable that the aforementioned Japanese firms may be petitioning him soon to give an “undertaking” for restraint.

Plenty of problems

The Japanese Prime Minister has become increasingly concerned at the economic problems he faces as the yen rises against other currencies and the exporters are finding it more difficult to compete successfully in overseas markets. He now refers to exports as a “negligible factor in expanding economic growth in future.” The new strategy he revealed is to be the stimulation of home demand by increasing public spending, which we seem to have heard somewhere before.

Mr. Fukuda neatly put his finger on one of the major difficulties facing the Japanese, who are by no means alone in the matter, and shows that capitalism, despite the efforts of so-called planning, simply continues to produce problems and contradictions. The profit motive governs production.

The important thing is to create demand in the midst of the problems of overcapacity and unemployment.

(The Times, 11th November 77)

Capitalist ideologies

The Chinese are said to have approached the British government with a view to ordering Harrier jump-jets. Apparently the so-called socialists are faced with a build up of forces on their border with the other so-called socialists, the Russians. The fact that the British government also refers to itself as “socialist” no doubt lends justification to the approach and completes the picture of this happy socialist band who act so differently from the capitalist governments. To an un-trained eye it would appear to be a straightforward business arrangement.

However Britain is a member of a NATO organization called Cocom whose function is to prevent the sale of weapons and plant for producing them, to “communist” countries. America is also a member and it might be thought that they would, as they are entitled, veto consideration of the order. Surely the Americans would not permit any hole-in-the-wall arrangement between all these “socialists". It appears however that the Americans have an un-trained eye in the matter. They have their reasons too.

The fact that there is a company to company agreement between Hawker Siddeley and Macdonald Douglas to manufacture the Harrier under licence in no way interferes with the sale of the Harrier by Britain to other states, I was authoritatively informed yesterday. A non-British member of Cocom’s coordinating committee told me a few days ago that the United States rarely raised any objection to the export of strategic materials to a Communist country if it was produced or manufactured in America.

(Daily Telegraph, 9th November 77)

Chrysler and the Cabinet: How the Deal was Done (1976)

Pamphlet Review from the September 1976 issue of the Socialist Standard 

Chrysler and the Cabinet: How the Deal was Done. Granada Television, 35p.

This is the transcript of a TV programme shown on 9th February 1976, in which the Cabinet discussions of the Chrysler UK motor company were simulated. The parts of Wilson, Healey, other Ministers and the Chrysler officials were played by political and financial journalists, and the programme was generally thought to have come close to the reality.

The Chrysler Corporation of USA proposed closing down its British subsidiary which had made losses in six of the last nine years, amounting to £60 millions, and was expected to lose another £40 millions in the next year. The Government’s concern was with the unemployment — 25,000 jobs or more — which would be created by the close-down. However, the Government’s newly agreed “industrial strategy” prohibited financing obviously unprofitable companies; at the outset of these discussions the only voice in favour of giving help is that of the Secretary of State for Scotland, where Chrysler is a major employer.

A report from the Central Policy Review Staff (the “Think Tank”) had said the British car industry had already 25 per cent, over-capacity. From the viewpoint of the British Leyland company, which the Government had recently bought for £1,300 millions, Chrysler was an undesired rival; nor, for the same commercial reasons, was there any case for merging Chrysler with Leyland. The loss of jobs was agreed to be a regrettable necessity, summed up thus by Healey’s impersonator: “There’s nothing socialist about preserving existing jobs for their own sake.”

The conclusion was foregone — and yet the Government did undertake to support Chrysler, to the extent of about £145 millions. Why, with everything apparently against it? First, political fear of losing votes, in Scotland particularly. Second, the existence of a Chrysler contract to export to Iran (Healey: “Persia is becoming an increasingly important trading partner with us and the Shah is a touchy fellow.”).

The third reason was not stated explicitly in the TV programme but emerges implicitly from it. This is the inability of governments to manage capitalism even on its own terms. The sapient Ministers talked of “the long term” and “the future”, meaning “if we can keep out of trouble this afternoon perhaps tomorrow’s mail will bring an unforeseen lucky break”. While the discussions with Chrysler went on, attempts were made (fruitlessly) to attract Japanese car manufacturers to Scotland. If unemployment was prevented by the Chrysler deal, how will its transfer to other companies be prevented? What sort of “strategy” is firmly agreed, then has to be abandoned at the first engagement?

This is an interesting booklet, more relevant to what goes on in capitalism than some expensive volumes of retired Ministers’ memoirs.

Vodka-cola (1979)

Book Review from the November 1979 issue of the Socialist Standard

Co-production deals between Western enterprises and East European governments are becoming big business and attract a lot of notice in the press. These deals now represent 10 per cent of East-West trade and are rapidly growing in number and importance.

Co-production is distinct from normal East-West trade, which is handicapped by the fact that it doesn’t allow the Eastern bloc to buy all it needs. The West doesn’t want payment for exports in roubles or other Eastern currencies as these are practically worthless. Russia has been paying for much of its imports with large amounts of gold but as this tends to reduce its price then Russia’s trading position simply worsens, while other Eastern countries have little or no gold anyway.

Barter deals are hopelessly inadequate as Western exporters rarely want the commodities being offered in exchange. Even so, barter does exist. Pepsi-Cola, long reviled by communist propagandists as a “monopolist”, has built a plant in Russia capable of producing 74 million bottles a year for Russian consumption. Since Pepsi wouldn’t take roubles and Russia needed its gold for American wheat, payment is made in Vodka and Pepsi were given the monopoly for selling Russian wines in the USA.

Despite Kruschev’s boast that Russia would surpass the West economically within 15 years, she has fallen further behind and the gap is widening all the time. To catch up, Russia and her satellites need Western technology but cannot acquire enough of it for the reasons given. Also, they already owe the West such a staggering debt (at least 80 billion dollars) that they cannot count on extended credit forever.

However, steps are being taken to rescue the Eastern bloc from its predicament, for a price, by none other than Western big business —the very “multinationals” who are supposed to be the mortal enemies of “international communism”. Just how and why this is being done is explained in a new book, Vodka Cola, by Charles Levinson. (Gordon and Cremonesi, £7.90.)

In the book Levinson lays bare the reasons for the current “detente” between the West and the Eastern bloc. This has nothing to do with either side learning to love the other but is dictated by their respective economic needs. The East must modernise its industry in order to keep its population passive. After all, expectations of a better life must be met someday. For Western big business there is the glittering prospect of a potential new market of 400 million people, plus the opportunity to switch its production away from a unionised, high-wage, strike-prone labour force to one which is state regimented, low-wage and forbidden to strike.

So the last thing the multinationals want to do is disturb the status quo behind the Iron Curtain. Any growth of political freedom there would produce genuine trade unions and the inevitable inroads into profit margins. Hence their enthusiasm for detente. Levinson also points out that the agreements signed by Eastern and Western politicians are only political window dressing. It was the businessmen of both sides who made the real breakthrough and all the politicians have done is merely help smooth the way for future deals. When it comes down to it, ideological differences are demolished by economic realities.

These co-production deals enable the West to sell the East what it needs and get paid, not in dud currencies or shoddy, inferior products, but in cheap Eastern made goods manufactured to Western standards which can be sold on the world market at a fat profit.

Co-production takes a variety of forms:

LICENCING: until the early 1960s only a few licences to use Western technology were purchased in the East. Now there are several thousand. These were previously paid for in scarce hard currency but now payment is likely to be in the products being made under licence. For example, Fiat, Volkswagen and British Leyland have been paid for their licences in vehicles and parts.

BUY-BACK: this means that industrial giants like Renault of France and Montedison of Italy will supply—in this case Russia—with an entire car factory and chemical plant and be paid in cars and chemicals for sale throughout the world. The Eastern partner is also helped to market its share of production through distribution companies specially set up for the purpose. In this way much needed hard currency flows back to the East to enable it to buy more of what it requires.

LEASING: the Eastern bloc also uses equipment rented from Western companies. So far this has not happened within Russia itself, but its merchant fleet has leased thousands of cargo containers and other equipment from the West, so privately owned means of production and distribution exist in part of the Russian economy. Levinson’s view is that leasing will increase because of the advantages it offers the East, among which is the acquiring of modem technology without spending huge amounts of hard currency. He predicts that it is only a matter of time until leasing will be allowed within Russia.

The list of “monopolists” involved in co-production deals makes fascinating reading: General Motors, Exxon (Esso), Ford, Unilever, IBM, Krupp, ITT (played a leading part in setting up Pinochet’s regime in Chile), Coca-Cola, Du Pont, Westinghouse, ICI, Union Carbide, Fiat . . . Many of them are bitter opponents of trade unionism in their own plants and all of them, needless to say, collect their share of the surplus value created by the Eastern workers employed in the various projects.

Cyrus Eaton, the American multimillionaire, revealed how it is done when he explained his 40 million dollar 50/50 deal for building a tyre factory in the East in 1970. The communist state partner would own and operate the plant. Eaton’s half would be in tax-haven Switzerland and would market the tyres in the West. Eaton says

“This enabled the Eastern country to earn hard currency and because of lower labour costs the venture can sell tyres cheaper than Western countries can. The plant in the East sells the tyres to the marketing subsidiary at cost —thus leaving profits to the joint marketing subsidiary.” (p. 87.)

Nice one, Cyrus.

All of this must have its effect on Western jobs. Naturally, the co-production partners deny this and claim that the increased trade will provide the West with 2 million new jobs. But the Eastern products, because they are made by low-wage labour, consistently undercut similar Western products. Indeed Western manufacturers and trade unions are forever protesting about “dumping” on Western markets. In Britain the footwear, textile, tailoring, motor car and TV tube industries, to name a few, have been badly hit by cheap imports from many countries and thousands of jobs have been lost. So while the British Communist Party demands action to “fight unemployment” their Eastern counterparts are busily contribute: it.

Unfortunately for the Eastern bloc the present type of co-production deal cannot fully solve their problem. The technology they are buying tends to be second rate and outmoded by Western standards. The West will not hand over the latest developments because it feels it does not have sufficient safeguards as things stand. For example, equipment and know-how supplied under one deal can easily be pirated and used by the East for other projects of its own, so Western companies are increasingly demanding a 50/50 share in the ownership of the plants as well as the products and profits. Because the Russians have refused to allow this they have failed to clinch several important deals. The Russian government’s refusal stems from an unwillingness to lose face: how would it be able to explain away such a blatant example of private, as opposed to state, ownership of part of “socialist industry?

Hungary and Rumania have gone some way towards meeting this problem. Although not allowing Western-owned plants, they do permit Western companies to own a large share of the profits of the joint venture (payable of course in hard currency). Volvo of Sweden has an agreement with Hungary for the assembly of Volvo cars with 48 per cent of the profits going to Volvo shareholders. This represents legal ownership of part of Hungary’s means of production. In Poland the government has gone all the way; foreign companies can legally own the entire project and if the deal is terminated then company can take out its original investment plus its share of capital gains.

The pressure on Russia to come some sort of compromise is enormous. Russia apparently needs the latest in mini computers but IBM and other suppliers are refusing to provide them. They want to protect their technology by retaining control over its use and means joint ownership of the project where it is being used. Only in this way can the company prevent its technology being applied outside of the contract.

Levinson frequently refers to the theories of Karl Marx and seems to have understood these better than most writers. For example, he says

“The end result of co-production operations is profits for the capitalists, and this means that the socialist enterprises are involved in creating the surplus value which Marxism regards as the basis of the capitalist class’s exploitation of the worker.” (p. 261.)

If the words “Eastern state capitalist” had been substituted for “socialist” then we couldn’t have put it better. He mistakenly attributes the failure of Russian nationalisation to “Marxist ideas” but continues

“Nobody (in Russia), unfortunately, had raised the minor question, ‘Whether the business be private or nationalised, how does it profit the worker who is subjected to the same authoritarian labour methods in either case?’ ” (p. 224.)

Although the book contains several other mistakes regarding Marx’s views, these cannot obscure the value of Levinson’s work as an aid to understanding how business, East and West, operates and what its priorities are. And we cannot help noticing that the analysis of modern society by Levinson, and many others outside our ranks, is very similar to our own. Nowadays, you don’t have to be a socialist to be struck by capitalism’s glaring contradictions and antisocial nature.

Vic Vanni

Blogger's Notes:

Charles Levinson replied to this review in the March 1980 issue of the Socialist Standard.

In connection to Levinson's book, the following might be of interest to some readers. In 1981, there was a fictional adaptation of the book entitled Beloved Enemy. Directed by Alan Clarke (who also directed Scum, The Firm and Elephant) and adapted for television by David Leland, it was transmitted on the BBC as part of the Play for Today series of dramas.

Beloved Enemy is available to watch on YouTube:

News in Review: Faversham (1964)

The News in Review column from the July 1964 issue of the Socialist Standard

POLITICS

Faversham

In one by election after another the Labour Party continues to notch up successes.

As each result is declared, both sides set their statisticians to work to show the voting figures in the most favourable light for them.

A Devizes sends the Tories into raptures—the dark night, they croon, is passing and brighter days are ahead. A Faversham puts the Labour Party back onto its hopeful feet, sets its mouth watering again at the prospect of power which, they think, is almost theirs.

A lot of this enthusiasm is inspired by the theory that nothing succeeds like success, that a big vote in one election begets an even bigger one at a later poll. That is why a party only rarely admits to having taken a beating in a fair and square fight. There is always some aspect of the poll which, selected and perhaps exaggerated, can take the edge off a defeat, and they play this up for all they are worth.

At Faversham the Tories showed their disappointment by dropping their beaten candidate, Mrs. Olsen. From the reports which came from the constituency, Mrs. Olsen did not seem to offer a very effective counter to the Labour candidate’s earnestly sympathetic appearance, which apparently impressed a lot of voters as sincere.

Mrs. Olsen tried to blow up Nationalisation as an issue, while Labour’s Mr. Boston was playing upon the elector’s preoccupation with food prices, rates and unemployment. In a constituency where the workless are something of a problem, the Labour line proved the better vote catcher.

In one of her statements, Mrs. Olsen revealed one of the prejudices (although perhaps she does not hold it herself) which affects a lot of the capitalist parties’ propaganda. Talking about Nationalisation, she said: “ It is worrying people . . . even housewives who are not supposed to be interested.”

Nobody has yet adequately explained why housewives—or any other women— should not be interested in political matters. This is one of the comfortable delusions which, as part of a wider ignorance and prejudice, helps to keep private property in existence. It is unfortunate that the delusion is as firmly held by many women as it is by most men.

And just like any other social prejudice, it has to go. The ending of the social distinction between the sexes will be one of the aspects of the humane world system in which the political parties which prey upon ignorance will be defunct.

ABROAD

Nehru

The death of Pandit Nehru provoked the customary valedictions from the world’s top statesmen, who are of course no more sincere in their expressed opinions about a man after he is dead than they are when he is alive.

At the Albert Hall meeting where tribute was paid to the dead leader, Sir Alex Douglas-Home said that Nehru was a man of contrasts. Indeed he was—in some ways which Sir Alec could not have had in mind.

Nehru was a professed man of peace who saw nothing wrong in the war over Kashmir, nor in the forcible occupation of Portuguese Goa; He was the accepted leader of what are called the non- committed nations, although he was committed up to his neck in the frontier dispute with China. He was the man who foreswore the production of nuclear weapons—as long as his country had no use for them.

When I asked what sort of conclusions his Government had reached when it studied the future of policy in Asia between a nuclear China and non-nuclear India, he replied with remarkable frankness and warmth that he was afraid that as a Government they had not given it much thought. (The Guardian, 23/10/61.)

He was—and this is the clue to an understanding of Nehru's career—the alleged Socialist who was busily building what he hoped would one day be a great capitalist nation.

It is at this point that we realise there was nothing of contrast in Nehru. He was presiding over the transformation from one type of property system to another in India and it is not unusual for this to be passed off as Socialist policy. Nor is there anything exceptional in the double-talk and double-think inseparable from this process.

Nehru's problems were massive. In his efforts to build capitalism in India he was confronted by a vast population seething with every kind of primitive mysticism and religious prejudice. These delusions do not mix with an economic and social structure based upon complex commodity manufacture; Nehru spent a lot of his life trying to break them down.

In the end, as we all know, the prejudices were not ready to admit defeat and Nehru, the great non-believer, was cremated in the same way as a great religious leader..

But he has made his niche as one of capitalism's innovators. His successors will carry on where he left off, trying to persuade the beggar in the dust that he will be better off as a member of an industrial proletariat, with chains of poverty which are thinner and lighter, but just as real and strong as those which bind him down today.

AT HOME

Epidemic

For the most part, modern society has a pretty tight grip on diseases like typhoid. Capitalism judges everything by its balance sheet and in this case it is preferable to make the initial investment in prevention of the disease rather than to be continually fighting epidemics of it. Sometimes the balance sheet comes up with the opposite conclusion and we all know what happens then. . . .

But the odd concern, in the hope of making a bit more quick money, will occasionally take a chance with the rules of public hygiene. This was the reason for the outbreak at Zermatt (which is now gingerly once more advertising its attractions as a holiday resort). It was also the reason for the lack of precautions in the corned beef factories in Argentina which were apparently responsible for Aberdeen's epidemic.

As in the case of Zermatt the facts are only slowly coming out and they are not pleasant. It now seems that the British government were aware of the risk in the corned beef over a year ago but, in the words of Scottish Minister Mr. Peter Noble, they considered it "not wise" to withdraw the stuff on “the scantiest evidence.”

Presumably the typhoid sufferers take a rather different view on the scantiness of the evidence and on the wisdom of clamping down on the suspect meat.

But when all this has been said, the basic fact remains. Typhoid is a disease of social negligence. Despite what the meat companies say, corned beef is not one of the world's prized delicacies; it is a typical working class food—substandard, mass produced, supermarket sold.

And once typhoid gets a grip it flourishes best in the most depressed living conditions—in the overcrowded rooms, in the shared lavatories and in the slum tenements which have no easy means of heating water for washing.

It is ironical that, in conformity with its profit motive, capitalism should spend so much in keeping diseases in check yet should sometimes be defeated by its very own economic conditions. But there is no irony in the fact that, when this happens, it is the same old working class who suffer.

BUSINESS

Rootes & Chrysler

It has been apparent for some time that Rootes were nervous about the magnitude of their gamble, on their baby car, the Imp, which has tied up so much capital in the factory at Linwood.

The link-up with the American owned Chrysler Corporation is probably a result of this, gamble—a method by which Rootes hope to strengthen their financial foundations to withstand any storm which may follow their Linwood investment,

Chrysler, whose fortunes have only recently been revived in the States, were looking around for just such an opportunity. Now some financial seers are predicting that before long Rootes will be entirely under American ownership and control, like Fords and Vauxhalls.

This is the sort of wicket on which the Labour Party thinks they can make a lot of runs. Their leading batsmen were soon hitting out. Mr. Callaghan wanted to know what steps were being taken to ensure that there would be no further dealing in Rootes shares to take control of the company outside the United Kingdom. Mr. Wilson went even further—he wanted guarantees about not only American but also “ German or other foreign ” interests.

This is the most blatant of playing up to nationalist prejudices. The Labour government of 1945 saw nothing wrong in this country accepting the American encroachments which went tinder the name of Marshall Aid.

The present Labour Party, at any rate while they are in opposition, attack foreign investment in this country as the invasions of money-mad international manipulators. But they also think that the opposite process—British investments and subsidiaries abroad—is an excellent idea, the fruits of good old British enterprise.

This doubtless goes down well enough with patriotic voters who once believed the Labour Party when they used to talk about being an internationalist organisation. Now all that nonsense has been dropped, which may mean a few more votes for Labour candidates.

The deal between Rootes and Chryslers was good business from the point of view of their profit accounts—which is the only viewpoint they are interested in. Capitalism is lubricated by such deals, and is powered by the motive for them.

And if the business deals are something to be expected, so is the dishonest reaction of political parties.

ABROAD

Goldwater

Whatever happens at the Republican Convention at San Francisco this month, Senator Goldwater has established himself as a serious force in American politics.

Once he was laughed at, for his quaint notions about Reds under the beds and his itching button-finger. The results of the Presidential primaries have shown that Goldwater’s neuroses are shared by millions of what are usually called normal, decent Americans.

Goldwater stands unashamedly for reaction. He stands for States Rights at a time when American capitalism is trying to resolve many of its problems by increasing pressure, and power, from the Federal centre. He stands against State insurance schemes just as their value to American capitalism is becoming so apparent He stands for an extreme—some would say fatally impetuous—foreign policy towards Russia at the moment when the American ruling class may be on the verge of allying itself with the Soviet Union in face of a possible longer term threat from China.

Goldwater probably appeals to the uninformed and apathetic sentiments of those American workers who are impressed by his rugged frontiersman’s facade. (They presumably ignore the fact that the Senator is descended from a Jewish family, who were not among the now-romanticised pioneers.)

But in his present vein Goldwater does not offer the policies which United States capitalism needs if it is to hold its dominant world position. Said The Economist of June 6th last: “. . . he has not grasped the nature of the power his country wields in the nineteen-sixties.” Yet he could turn out no different from the other demagogues who have climbed to power on extreme propaganda and have then had their wilder notions tamed by the realities of office. Perhaps it is true that, as Governor Scranton—the one time hope of the anti-Goldwater brigade—said, the Senator is “not as conservative as he thinks.”

For the moment Goldwater is "committed to his present line and will, therefore, probably continue to thump it out if he gets the Republican nomination. If— and this is as massive an “if” as ever was postulated—he becomes President he may well alter his line to fit in with the requirements of American capitalism.

We are accustomed now to the policy reversals of so-called Left Wing politicians when they are catapulted into power. A President Goldwater, as a Right Winger doing the same thing, would make an interesting item for the scrap book.

Finance and Industry: U.S. bogy (1964)

The Finance and Industry Column from the July 1964 issue of the Socialist Standard

INVESTMENT

U.S. bogy

The recent Chrysler/Rootes deal, discussed elsewhere in these pages, has again revived the usual talk of American financial encroachment—not least among our Labour politicians. They raised a similar sort of fuss, it will be remembered, when American Ford increased its stake in U.K. Ford from 55 to 100 per cent, a few years ago.

Similar heartburnings were caused in France last year when Chrysler took over control of Simca, and the French government actually stepped in to put to stop to the deal when they heard that U.S. General Electric was after a stake in Machines Bull, the big electronics firm. But the significant thing to note about the last affair is that the French government eventually relaxed their opposition and allowed a modified arrangement to go through.

For the facts are simple enough. American capitalism is in search of outlets for its capita], and in many cases European firms have not sufficient resources of their own to finance their expansion. Yet expand they must if they are not to be left behind in the race for sales and profit. Bootes with Chrysler’s resources behind them are a far different proposition than they were on their own—for years, in fact, the speculation has been whether they could really survive for long against the bigger units of BMC, Vauxhall, and Ford. Similarly, Machines Bull plus General Electric is in a vastly stronger position to face up to IBM and Elliott than it was on its own. To see the facts as they really are, it is only necessary to observe that IBM’s turnover is twenty times that of Machines Bull; that National Dairy Products, an American milk firm, has a bigger turnover than I.C.I.; that United States Steel produces more steel than the whole of West Germany; that the turnover of General Motors is greater than the whole of the “gross national product” of Holland, and its profits bigger than the national product of Eire.

One way or another, American capital will keep coming into Britain and Europe. Capitalism hates a vacuum. As usual, it is bigness that counts, and bigness that will win the day. And, just as important for European capitalism, if one country refuses it—it will go elsewhere. Modernisation of the Moselle 

STEEL

The Moselle canal

The recent opening of the Moselle canal is a wonderful example of the hard economic facts behind politics.

Just as German capitalism always had envious eyes for the iron ore of French Lorraine, so did French industrialists seize every opportunity to lay their hands on the iron and coal of the Saar. In 1920, the Versailles treaty gave France control of the Saarland for 15 years—as well as handing back Lorraine. In 1945, again, the Saar was incorporated in the French zone of occupation; later, in 1947 it was set up as an independent state though linked economically to France. In 1950, France granted it complete self- government—but in return for its coal output (15 million tons) for fifty years.

Came the Common Market. In 1956, French capitalism was forced to play yet another hand. In return for the handing back of the Saar to Germany, the latter was to participate in the canalisation of the Moselle. By this hard bargain—for both sides—barges of 1,500 tons are now able to travel 170 miles from Thionville to the Rhine, and French steel will be selling more cheaply in South Germany than even Ruhr or Saar steel. The greatest opposition to the canalisation of the Moselle came from the Ruhr steelmakers—it is easy to see why.

So determined was France to get the project through, and so reluctant the Germans, that even with the Saar thrown in the French government had to pay £48 million towards the project, compared with Germany’s £22 million. But already they are planning to extend the canal southwards to Metz and Nancy. Eventually, the plan is to link the Rhine with the Rhone and form one great waterway between the Mediterranean and the North Sea. With huge barges plying along this thousand mile canal, transport costs will be cheapened for French industry in particular. Already German, Dutch and Belgian shippers are competing with their French counterparts for traffic, and the German and French railways threatening to cut their tariffs.

Under capitalism the big get bigger, and the small are forced more and more to the wall. At first sight, there seems little connection between Chrysler moving into Rootes and 5,000 ton barge convoys moving along the Moselle. But the connection’s there alright. Just call it size—plus the prospect of profit.

Stan Hampson

Rot about Rootes (1964)

From the July 1964 issue of the Socialist Standard

Early in June the newspapers and the radio and TV announcers told us that we were all getting hot under the collar about the news that Chrysler, the car firm, was paying £12 million for part ownership of Rootes Motors. Those who were telling us how excited we were had two versions of the facts, one designed to raise our temperature to fever heat, the other to reassure us that all is well. The head of Rootes, along with government spokesmen, said that it is a commendable thing, bound to benefit us all, that Chrysler should be helping Rootes with cash and experience to sell more cars than before. The Labour Party leaders and leader-writers denied this and asked us to view the event as a very sinister thing from which we shall all suffer.

We were all supposed to know that the supreme significance of the deal lies in the fact that Chrysler’s is an American firm and Rootes is British. Probably three quarters of the population didn't know and don't care, but with a general election not far away, any stunt that can scare a few thousand voters into changing their allegiance is important to the professional politicians. 

So we are asked to believe that it is bad for British workers that an American firm should buy shares in a British company because the next step may be that Chrysler's will gain control of Rootes and be able to determine its policy and activities. Mr. Harold Wilson, leader of the Labour Party, led the attack, and, with minor degrees of emphasis, most of the newspapers committed themselves to the opinion that, whether or not control of Rootes is in danger of passing to America at the present time, it would certainly be a serious matter if that ever happened. The Daily Worker, on June 10, took a line quite indistinguishable from that of the Labour Party spokesman in an article with the title, “It may be good for Chrysler, General Motors and Fords, but . . . It's no good for Britain.”

If the whole uproar is regarded as no more than an attempt to exploit anti-American feeling in order to win over some voters from Tory to Labour, there is no need to delve for any deeper argument; but in fact those who made the running for the protest were only too anxious to justify themselves with what purported to be reasons in addition to jibes about foreign control.

Most of the attempts at argument were remarkable chiefly for their vagueness and obscurity, but here and there some writer or speaker committed himself to something definite. So, for example, the Daily Herald on June 9. For the Herald's leader writer it was not an objection to American firms investing money in this country: on the contrary, the Herald agreed with the Government's claim that such investment deserves to be welcomed. But suppose, said the Herald, the investment is increased and eventually Chrysler's controls Rootes as Americans already control Fords and Vauxhalls. And suppose further that there is “ a slump in international markets,” what will the American owners do then? (It may be recalled here that the Herald seem to have overlooked its own belief that governments and economists now know all about preventing international slump, anyway).

Well, what will happen if the American motor firms with British subsidiaries find that they cannot sell all the output both from America and from Britain? The Herald thinks it knows that the answer is obvious.

If output and jobs were at stake, obviously preference would be given to American output and American jobs—not British.

So far from being obvious it is patently untrue and absurd. It asks us to believe that American employers are motivated by the wish to do good to American workers and that in order to have the motor firms in this country conducted in the interest of British workers we must have them run by British, not American employers.

How silly can newspapers get? If the Americans who own Chryslers are anxious to give jobs to America’s four million unemployed, why are they putting their £12 million into a firm in Britain instead of in a firm in America?

And if the Herald believes that British investors invest here for the good of British workers, how would they square it with Mr. Harold Wilson’s statement about Conservatives generally that “their interest is not in production. They are too busy drooling at the mouth at the prospect of increased share values which benefit the investors or speculators and bear no relation to national needs.” (Sunday Telegraph, June 7, 1964).

The whole thing is nonsensical. The capitalist, British, American, or any other, invests in order to make profit. He does not care whether he sells motor cars (or anything else) at home or abroad. He is equally willing to sell whole factories for erection abroad—and up to this point the Labour Party protestors about the Rootes deal say it is a very good thing; but it suddenly in their eyes becomes a very bad thing if the motor car or other article is made in Britain to the order of an employing company in America.

The Wilsons will tell us that “our” motor firm is passing under foreign control, as did Fords of Dagenham, but as far as the workers are concerned it is not “our” motor firm, whether control is located at Dagenham or Detroit: it just makes no difference. And Rootes does not belong to the British workers and they therefore cannot be deprived of the ownership they do not have.

The capitalist nature of the world is not changed, is not made better or worse, by changes of ownership of companies, or by changes from private capitalism to state capitalism (nationalisation). Those who claim that these are issues of “moment to the workers” are simply misleading them.

Edgar Hardcastle

These Foolish Things: The system dictates (1996)

The Scavenger column from the June 1996 issue of the Socialist Standard

The system dictates

[PilkingtonJ is one of the few UK companies to have accepted that works councils, the elected consultative bodies beloved of the European Union, aree a good way to build consensus on key strategic issues. When it comes to sacking people, however, Pilkington found that the rules governing the release of price-sensitive information to the stock exchange, meant that the first that Pilkington’s workforce knew of this particular strategic decision [to axe 1,900 jobs] was on the radio rather than through any consultative mechanism. Guardian, 28 March.

Are jobs bad for prosperity?

Another healthy rise in American jobs yesterday sent the Treasury bond market into a bout of heavy selling again and appeared to rule out any further cuts in the US interest rates in the short term. The economy created 140,000 jobs in the non-farm sector in March, many more than Wall Street economists had been expecting, this followed a rise of 624,000 jobs in February', revised from last month’s initial estimate of 705,000, which had sent the Dow Jones industrial average into a 171-point plunge and wiped three full points off bond prices. Times, 6 April.

Smoking, poverty and profits

BAT unveiled record pre-tax profits of $2.4 billion for 1994, fuelled by the sales of 670 billion cigarettes worldwide . . . Among the countries where BAT cigarette sales have started to increase are: Poland, Romania, Russia, Uzbekistan, Hungary and Vietnam. Guardian, 7 March.

Capitalism’s iron fist

The International Monetary Fund, the Treasurers of world capitalism, has prescribed even more grinding poverty for the world’s working class. Its recently published World Economic Outlook stated that there would need to be further cuts in spending on health and pension benefits by the governments of industrialised nations in order to reduce the high interest rates which damage the profitability of capital. Tax increases, the report said, would not solve the problem because that would hit capitalists.

Telling figures

Car-makers spent a record £515 million on advertising last year. With 1,945,366 sold in Britain, that made the average spend per new car £265 . . . More than half [the cars] went to fleets, say industry sources, so the cost for every private sale was an incredible £1,800-plus. Financial Mail on Sunday. 14 April.

Both couples remain friends

Carlo Giambrone was “gobsmacked” [at being on the same divorce list as the Yorks). The unemployed mechanic arrived at court No. 1 in Somerset House yesterday in a bomber jacket and jeans to tell the judge he could not afford to pay the costs awarded him after his divorce . . . “I have my kids every' weekend. I shall carry on giving my wife what support I can, though at the moment I’m only getting £74 benefit every two weeks . . ." Few observers believe that the £2 million settlement, £500,000 of which has been set aside for the Duchess, will be sufficient to keep her in the lavish lifestyle she has become accustomed to. Guardian, 18 April.

The Scavenger

A Look Round. (1906)

From the August 1906 issue of the Socialist Standard

Loose phraseology is responsible for much misunderstanding concerning Socialism, and as it is often indulged in by professing Socialists it is small wonder that our opponents also sin.

* * *

Reynolds Newspaper often contains the statement, “A Socialist is one who advocates a more equable division of property, and a better arrangement of the social relations of mankind than one which has hitherto existed.” This could be said of almost all “social reformers” whether anti-Socialist or non-Socialist. They can and do advocate certain schemes with the object of bringing about such a change as is conveyed in be the words quoted, and yet at the same time can and usually are violent antagonists of Socialism.

* * *

I therefore suggest that Reynolds should amend its ways and reply to future querists somewhat as follows: “A Socialist is one who advocates the establishment of a system of Society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community, holding that in present-day Society the working class, by whose labour alone wealth is produced, is enslaved by the capitalist or master class, who own the land, factories, railways, and other means of living.”

* * *

“A more equable division of property” and “a better arrangement of the social relations of mankind” could be brought about and still the working class could be slaves of the masterclass. Profit sharing, model factories, co-operative societies, land law reform, free maintenance, a minimum wage, could all be adopted and the workers would still be dominated by the master class, still lack that freedom which Socialism alone can bring, because Socialism alone attacks the foundations of Society, and aims at the abolition of that class ownership of the means of life which gives the owning class domination over the working class.

* * *

From Reynolds to Joseph Chamberlain. Speaking at the Savoy Hotel Banquet to the 1900 Club, Joseph Chamberlain exhorted the Unionist Party to “meet Socialism by pointing out how impossible were its methods, and how much better its objects could be secured in other ways. For one thing, they could point out how far fiscal reform would carry them in that direction.”

* * *

H’m, Yes. Imagine any section of the Capitalist Party, whether of the Reynolds or Chamberlain label, helping to secure the object of Socialism, which object I have stated above ! But let the Unionist Party and the Tariff Reformers come on. Let them meet us in public debate, and point out our impossible methods, and how they could bring about the object we have in view by Tariff Reform or by any other item in their program, a program which, as Mr. Balfour has remarked, is “not merely to be distinguished from Socialism, but is the direct opposite and the most effective antidote to Socialism.”

* * *

In opposing Tariff Reform even Sir H. Campbell Bannerman was forced to admit that after 60 years of Free Trade we have 12,000,000 of our population on the verge of hunger. What reformers of all brands have to face is the indisputable fact that all over the world, no matter what political, fiscal, religious or other conditions obtain, the working class is poor and the master class is rich. Is this because there is not sufficient wealth produced to satisfy the needs of all ? No. Is it that the working class is poor because its members do not work long enough or hard enough, or because they drink ? No, for the master class drink and drinking does not them make poor ; they are rich altho’ “they toil not neither do they spin.” The universal poverty of the working class, the fact that the producers of wealth lack the necessaries and comforts of life, is due to the ownership of the wealth-producing instruments by the master class, which ownership enables them to control the disposition of the wealth produced by the working class.

* * *

The Woolwich Pioneer reports a meeting held under the auspices of the local I.L.P., at which Mr. H. S. Wishart presided and Mr. Moore Bell delivered the address. In his opening remarks Mr. Bell stated he did not see that there should be any conflict between Labour and Liberalism, because Liberalism should mean the uplifting of the working classes, justice to the workers, fair play, and a fair distribution of wealth amongst the workers who produced it. The Labour Party stood for these and therefore there should be no conflict.

* * *

In view of the compacts made by I.L.P. candidates with Liberals at the recent General Election one is not surprised at such a speech by an I.L.P. lecturer. But a protest must be entered against members of such a Party as the I.L.P. calling themselves Socialists, whilst declaring that there should be no conflict between Liberalism and Labour. And as the Labour Party stand for the same things as Liberalism, where is the necessity for the separate existence of the “Labour” Party. Let them dissemble and join the Liberals.

* * *

It may be objected that the speaker did not say that there is no difference but that there should be none. But this was either loose phraseology on his part or ignorance of Liberalism. In either case it proves his unfitness to instruct the working class.

* * *

We have to consider not what Liberalism, in the opinion of Mr. Moore Bell, should be, but what it is. Like every other phase of capitalist politics, it stands for the domination of the master class over the working class. Its philosophy and that of the Socialist are as wide asunder as the poles. The one assumes, not only now, but for as long at any rate as its exponents will live, the existence of a subject class and a dominant class, and its efforts are directed to maintaining and entrenching the dominant class in its position. Now and again, as the exigencies of the political machine demand, it makes “concessions.” But all the time it has one object and one alone in view, the strengthening of its position and the side-tracking of the working class out of the path that The Socialist Party urges it to follow.

* * *

On the other hand the philosophy of the Socialist finds expression in the belief that the working class, in the order of social evolution, will achieve its freedom from the domination of the master class, and is the last class to be emancipated. It holds that this emancipation must be the work of the working class itself, and not of the middle-class place hunters and rejected Liberal candidates who abound in the I.L.P., and it has therefore nothing in common with Liberalism or any other capitalist “ism.” It is up against them all, all the time.

* * *

The Aston Strike, the strike of workers employed at Dunlops, has collapsed, all having returned to work whom the Company would take back. The men were members of Will Thorne’s Gas Workers’ Union, but, pleading a technical offence on the part of the Strikers, the Union refused to support them. But, of course, Mr. Thorne, M.P., J.P., is now a capitalist law enforcer as well as law maker, and, naturally, is a stickler for the “law.”

* * *

Some three years ago, R. P. Houston & Co. started a line of steamers from Liverpool to Hamburg and another from Leith in order to compel the Union Castle Company to reduce freights. Houstons have now joined the Trust and, as a consequence, there has been a material all-round increase in general cargo freights.

* * *

During the past quarter the income of the London Society of Compositors, exclusive of balance brought forward, amounted to the sum of £8,865 19s. 7d., and the expenditure to £9,353 0s. 9½d. The balance in hand on April 1st was £703 0s. 11d. and on July 1st £225 19s. 8½d.

J. Kay

Voice From The Back: Weakest Link—for real (2001)

The Voice From The Back Column from the February 2001 issue of the Socialist Standard

Weakest Link—for real

Employees at one of Britain’s fastest-growing and most respected companies, FI Group, are being offered a £1,000 bounty to name colleagues who could be replaced by cheaper workers from India. . .

Financial Mail on Sunday, 24 December.

How it’s done

Former BMW boss, Bernt Pischetsrieder today admitted that he had deliberately provoked Rover’s crisis two years ago to weaken union bargaining power. Mr Pischetsrieder, now a top executive with Volkswagen and running its Seat subsidiary, admitted he had undermined the launch of the Rover 75 as the “last chance saloon” in front of the world’s press at the Birmingham Motor Show in 1998. He said BMW had been deep in negotiations at the time over company demands to boost productivity and the ploy was needed to win concessions from workers as the strong pound started to hurt the business.

Evening Mail, 13 December.

Only joking (?)

“This Christmas, indulge in a little blackmail, extortion and torture.” Advertisement for an Olympus camera.

How the wealth is spent

Forget Monte Carlo and Belgravia, for the very rich in 2001 the ideal home has no postcode. Instead they are trying to secure one of the few remaining apartments aboard the world’s first residential cruise ship . . . With no fixed abode, residents are not liable to pay tax and one Monaco-based oil trader is already arranging the transfer of his entire business to his new floating home . . . apartments on the 12 decks cost between $2 million (£1.4 million) and $5 million . . . one Saudi businessman signed for his £3.5 million pad, with its £250,000 annual service charge, within 15 minutes of reading the brochure.

Times, 27 December.

How the wealth is made

The [European] Parliament will be told that clothes for Adidas were made in two factories using child labour, forced overtime and sexual harassment. Representatives of workers in two Indonesian factories supplying the German company will tell Euro MPs that in the Nikomax Gemilang and Tuntex factories, in the Indonesian capital of Jakarta, children as young as 15 were: made to work 15-hour days; expected to do at least 70 hours a week and punished for refusing to do overtime; paid less than $60 a month, rates below the International Labour Organisation’s demand for a living wage; penalised for taking leave during medical difficulties and had illegal deductions taken from wages as punishments for minor misdemeanours . . . Pay at the Nikomas plant was increased to more than 9,000Rs (75p per day) following the campaigners complaints, Adidas said. 

Observer, 19 November.

How the wealth is lost (1)

More pensioners died from cold last winter than during any winter since 1976. If latest wealthier predictions are correct, the death toll this winter will be even worse. Almost 55,000 people died from cold-related illnesses between last December and March, new figures from the Office of National Statistics reveal. The figures will acutely embarrass Ministers who had pledged to end pensioner poverty. “It’s a tragedy that people in Britain are still literally freezing to death and a main reason is poverty,” said Ben Harding of Help the Aged. “We deal with thousands of cases where older people can’t meet the costs of heating their home. They need heat all day and sometimes at night are particularly vulnerable.” 

Observer, 26 November.

How the wealth is lost (2)

The number of people in Britain classified as very poor has increased by half a million since 1997 when Labour came to power, according to an independent report. The number of people living in households with less than the 40 percent of the average income is now 8,750,000. The study, published today by the Joseph Rowntree Foundation, also reveals an increase in the number of people living below the poverty line—defined as less than half the national average income—to 14,250,000 over the past two years. That is one million more than in the early 1990s and more than double the number of the early 1980s. Older people are suffering more according to the survey. Since 1993 the proportion of elderly households helped to live at home by their local authority has fallen by 30 percent. 

Times, 11 December.

News: Vauxhall closes at Luton, Fishing quotas (2001)

From the January 2001 issue of the Socialist Standard

Vauxhall closes at Luton

General Motors’ plan to close its Vauxhall plant in Luton is a devastating blow to the workers involved. Many will be thrown on the scrap heap without hope of ever working again – poverty being their lot.

Despite all the howls of shock, surprise and indignation from certain sections of the bourgeois media, this did not just come out of the blue. It is part and parcel of GM’s rationalization programme to cut production capacity in Europe and North America by 10 percent in an industry which is suffering from chronic overcapacity, ie there is a glut of cars on the market. GM, of course, are not the only ones. We are all too familiar with the tales of woe from Rover (Longbridge), Ford (Dagenham) and South Korea’s Daewoo.

The overall context of all this is the current crisis of capitalism and the increasing concentration of capital into fewer and fewer hands. The last couple of years has seen a wave of mergers and ‘alliances’ in the automobile industry the result of which is that five companies (GM, Ford, Daimler-Chrysler, Toyota and Volkswagen) account for more than two thirds of global car sales.

Such action has failed to prevent sagging profits. GM lost $l8lm in Europe in the third quarter, which is expected to double in the final three months of last year, according to the Economist.

The Economist also says that as such profit reports have damaged GM’s share price “by rolling together a bunch of radical announcements, GM hopes to show Wall Street that it is serious about bringing its problem children to heel”. The class struggle has not gone away.

Let’s not forget that the working class has also had to endure belt-tightening and ‘social partnership’ (‘we’re both on the same side now’). The workers at Vauxhall in Luton increased productivity and ditched militancy, and their reward was to be sacked for producing too many cars. In short, they have worked themselves out of a job!

The only way to make any sense of this madness is via Marxian economics. Overproduction is a natural part of capitalism’s accumulation cycle, not its antithesis as pro-capitalist economists like to argue. In their competitive search for profit and market share, capitalists over-invest, only to find later that the market is not as big as they first thought.

The bourgeois media hacks may refer to this phenomena, but they cannot place it in any coherent theoretical framework, which is why it is mentioned in the same breath as peripheral things such as fluctuating exchange rates and monetary/fiscal policy. No reformist solution can he found to the madness of capitalism, while the central contradicdon of capitalism remains ie that between socialised production and class monopoly of the means of production.

Fishing quotas

The “invisible Hand” of the market has proved its efficiency once again. On 15 December, EU ministers agreed to heavily reduce fishing quotas within European waters to combat over-fishing. This hasty action takes place after fishing stocks have steadily fallen since records began in 1963. There are reckoned to be 70,000 tonnes of cod in a sea where, in 1970, there were 250,000. The cuts represent the biggest reduction in the EU since the quota system began. The allowable catch of cod in the North Sea has been reduced by some 40 percent, down to 48,600 tonnes per year, and catch of hake has been reduced from 226,000 tonnes per year to just 42,000 tonnes.

Despite having reduced fish stocks to below half the level scientists reckon necessary to ensure recovery of the species, the partisans of business resent having to ease their exploitation of fish. Elliot Morley, British Fisheries Minister, boasted that he had managed to mitigate the scale of the cuts, saying he had saved “£20 million” worth of catch for British fishermen. Meanwhile, industry representatives complained that the cuts were too severe. Representatives of chippies maintain that old fashioned cod ‘n’ chips is not threatened.

So that’s all right then.