Recession in the United States and Canada (1958)

From the June 1958 issue of the Socialist Standard

The United States is at present in the throes of the worst period of industrial stagnation it has experienced since the 1930s. And Canada, as number one U.S. satellite, with an economy closely interwoven with that of the U.S., fares no better. The seriousness of the situation may be indicated by the figures for unemployment, which in March reached 5,198,000 in the U.S., and 590,000 in Canada.

Political, business and other leaders in both countries respond to the condition m the same shallow manner.

When the existence of the “recession” was officially recognised some months ago, U.S. President Eisenhower proposed to deal with it by substantial tax reductions, which, he said, would increase purchasing power deplete, surpluses and start the wheels of industry turning again. Mr. Pearson, Canada’s Liberal leader, also advanced this thought in the last election campaign. The proposal has not yet been put into operation, perhaps because Mr. Eisenhower forgot about it and Mr. Pearson failed to become Prime Minister.

At present Mr. Eisenhower is lending his support to “operation optimism." Lack of confidence is now blamed for the recession and this confidence must be restored. People must in some way be encouraged to buy goods, even to the point of extravagance, they must, in Mr. Eisenhower’s words, be urged to “buy anything.”

Following this line of reasoning, U.S. capitalists are doing their best to propagandise themselves back to prosperity. The Advertising Council, a top advertising group, has started a four-month “confidence in a growing America” campaign, intended to improve the “economic attitudes” of consumers. Auto dealers in 110 cities have started sales drives featuring the slogan, “You Auto Buy Now.” It is expected that this campaign will spread to 200 more cities. Cleveland has started a “Buy Now” campaign, with a “V for Values” theme and a “Miss Prosperity.” Boston is planning a POPS (“Power of Positive Selling ”) drive to “combat loose recession talk.” In New York a “National Sales Crusade” is being launched. Some business men are wearing embroidered pocket handkerchiefs proclaiming “Business is GREAT.” An appliance concern has issued large lapel buttons saying “Business is Good.” The Public Relations Society of America has asked its members to send all optimistic news they can about their companies to a central clearing house for national distribution.

If empty prattle is an effective weapon against hard times, there is enough of it circulating at present in the U.S. to take care of all eventualities.

Canadians are not able to chase banshees with the same vigour and versatility as their American cousins, but they do have the same tendency to deliver sledgehammer blows at everything except the nail. Prime Minister Diefenbaker thought a while ago that diverting trade from the U.S. to Britain would help. Now he insists that he was misunderstood. Throughout the winter a Government-sponsored campaign to “Do It Now” was carried on. Billboards, radio, television newspapers, all were used to urge those who needed jobs done to have them done at once. More recently the trade union movement has been taking up Mr. Eisenhower's proposal of lower taxes. Claude Jodoin, Canadian Labour Congress president, at the recent CLC Convention, dealt at some length on this theme, seeing in lower taxes a billion extra dollars being put into the pockets of the consumers, “particularly the poorer consumers.”

Meanwhile the employing class, despite their playfulness, are not passing up a favourable opportunity to look after themselves. The Dominion Bureau of Statistics reports that the income of Canadian labour in the one-month period from December to January had declined 4.5 per cent., and hourly wages in manufacturing declined from $1.65 on January 1st to $1.64 on February 1st. The decline between December and January can be attributed mainly to increasing unemployment, but that cannot be said of the later decline.

Mr. Jodoin and the trade unions should take a long look at these figures and then start grooming themselves for some independent working class activity.

What they ought not to be doing is looking to their masters for sensible or helpful suggestions.

Jim Milne,

(Socialist Party of Canada).

Finance and Industry: Enter the trading stamp (1963)

The Finance and Industry Column from the July 1963 issue of the Socialist Standard

Enter the trading stamp

In this present world of ours, goods are produced for sale. To enable things to be sold, a whole complicated network of distribution has grown up, involving wholesalers (first, second, and the rest), retailers, hire purchase companies, credit firms, discount houses, as well as sundry other middlemen and hangers-on. Each of these takes his cut, which naturally he tries to make as large as possible, from the process whereby the articles of life find their weary way from the factory to the consumer.

Now yet another group of middlemen are trying to muscle in the trading stamp companies. They are not, of course, entirety new to this country, but so far they have not played much of a role. In the United States, on the other hand, they have become big business and some of the American firms are now invading Britain.

Arguments are already heated about whether the consumer really gains anything from trading stamps. Some observers say that he does and that it is the retailer who does not give stamps who suffers by losing his trade to his competitor who does give them. Others say that American experience shows that the consumer may benefit slightly at the beginning but that later he will be no better off because more and more retailers will go over to the stamps and add their cost to their selling prices. They allege that this has already happened in the U.S., where the net result of the trading stamp boom has been to put up retail prices to the point where what the consumer gets back in stumps he pays for in higher prices.

But all this is really beside the point. Whether the consumer gets a small advantage at the expense of the retailer, or the latter makes it up by higher prices, it only serves to conceal that all that has happened is that yet another set of middlemen has managed to get into the act, getting a nice fat rake-off for doing something which is utterly useless from the point of view of actual production.

It really amazes us sometimes the way people will dismiss Socialism as utopian, but accept all the idiocies of capitalism as normal and reasonable. Not one ounce of extra wealth is produced from the activities of the trading stamp companies; the only result is to sharpen the struggle over the profit derived from what has actually been produced.

Competition goes supersonic

Things look like moving faster than ever in the air world. And we don’t mean only aeroplanes. The prospect of lots of extra supersonic bangs before long is going to disturb more than the sleep of those unfortunate to live too close to airports. Lots of airline operators, as well as politicians, are already reaching for the tranquillisers. Everything seems ready for yet a further round of waste, muddle, and stupidity in the international air industry.

Pan-American's decision to order six Anglo-French Concords took only 24 hours to squeeze an announcement from President Kennedy that the United States were going to build an even faster plane. The staggering sum of $750 million has been mentioned as a likely cost.

The Concord venture is being supported by the British and French Governments to the tune of £75 million from each. The final cost may well be more. All the purpose of all this vast expenditure of wealth? To enable a microscopic few of the world’s inhabitants to cross the Atlantic in three hours or get to Australia in half a day.

All this against a background of waste and absurdity in which the great majority of the airline companies are already losing money and where the pace of competition is so hot that large numbers of perfectly good aircraft are discarded with years of useful life in them. So fierce is the drive for speed that many of the world's airports are no longer really capable of coping with the planes. Now all the sorry story over jets seems likely to be repeated with supersonic aircraft.

Not all the experts are happy about the new development. Lord Brabazon is one. Instead of “promoting air transport for the peoples of the world,” he has said, “the airlines have simply helped the rich to travel vast distances at very higher speed and cost.” And, he added, “A big machine carrying 200 people in comparative comfort at up to 250 m.p.h., but landing at no more than 60 knots should be safe, welcome, and pay.”

But Lord Brabazon, more than most, should know that his appeal will go unheeded. Air transport and aircraft construction are no longer the concern of private capitalists, but have become wards of the state. In general, they now make no more sense, even from the capitalist economic viewpoint, than the vast industries that have grown up to throw rockets into space. They have become part and parcel of the struggle between national groups, in which the various governments are prepared to go into all sorts of projects, spend vast amounts of money, engage in ridiculous competition with each other. They are a supreme example of the tendency of the units of capitalism to get bigger; in the air it is no longer the private capitalists that fight each other, it is their national states. Behind every aircraft company there are state subsidies, government orders, and national military needs.

No, the Concord was not well-named. Discord would have been more appropriate.

Facts about fish

A recent report from F.A.O. reveals that 1961 saw the world's highest production of fish—just over 41 million tons. This shows an increase of 10 million tons, or 30 per cent., over the total catch in 1957, but the picture is really not as optimistic as it looks.

Most of the increase is the result of a phenomenal rise in Peruvian production —of small anchovies processed into animal feed. Apart from this and "a modest rise in the Chinese catch, world production has remained virtually static. Indeed, the alarms are already sounding of a likely decrease in production as the well-known fishing grounds become depleted. The boats get bigger, their engines more powerful, and their range ever-wider, but the catch tends to get smaller. Competition has led to overfishing.

But, as usual, the paradox of production under capitalism discloses that there are still many more fish in the sea than ever come out of it; of the sea’s possible production, 90 per cent. is still left untouched. And even under present conditions. F.A.O. reckons that the total world catch could be doubled without too much danger to stocks. Today, 80 per cent. of total production is caught north of the Equator; the southern seas are almost unfished.

Capitalism will itself see to it that the oceans of the world give up more of their riches. But progress will as usual be slow and wasteful. The trawlers of dozens of countries will continue to compete fiercely with each other; will set out to fish over the same grounds; will spend useless weeks at sea, some of them, before reaching fishing areas which the trawlers of other countries can reach in a quarter of the time. There will still be disputes over international rights; over 3 mile, 6 mile, 12 mile limits; prices will still be subject to catastrophic fluctuations. Over all will remain the constant threat of overfishing.

Even in this situation, F.A.O. tries to introduce a little order and co-operation, but competing self-interests foredoom its efforts to failure. What is required is the harmonious, organised and co-operative development of research and productive techniques to provide a steady, reliable, and efficient production of food from the sea.

But we shall not get that under capitalism.

Stan Hampson

Hire Purchase (1955)

From the June 1955 issue of the Socialist Standard

“To Have and Have Not”

It is often said that Punch is the great social historian of the last 100 years. Since comic journals thrive on aptness rather than humour, they do in fact provide a minor guide to changes in manners and morals.

A joke that has entirely disappeared now is the one about “the instalments on the furniture.” Continually, in magazines of the 1920’s little boys blurted out that the settee wasn't paid for, and men called to take back the chairs when guests had come to tea—the psychology being that, 25 years ago, to buy on hire-purchase was to have a guilty secret.

All different nowadays, of course. There are even good, wise reasons for instalment buying: for example, if the thing goes wrong the firm will see to it. Hire-purchase is an accepted social fact. Last year, half the radio sets, seven-tenths of the furniture and bedding and vacuum cleaners and TV sets, and nearly all the refrigerators and washing machines sold in this country were bought on hire-purchase. “Cash only” shops are the exceptions now, and very recently the instalment system has spread as far as air travel and holidays.

That is not to say all reprehension of hire-purchase has ceased. Generally, there have been two sorts of objections to it. The one voiced by most working people in the past was strictly practical: “I’m hanging no millstone of weekly payments round my neck,” said the poor, poverty-hardened man in Love on the Dole. The other objection was that to have something before paying for is wrong—apparently a moral view but in fact only cash customer’s attitude. The people who largely held that view were the better-off, professional and black-coated workers; since the war their position has declined, and so consequently has their moral objection to hire-purchase. Many of the “swell” shops, in fact, now advertize hire-purchase facilities.

Hire-purchase trading has gone on for at least a century. Before 1914 it was mainly a hole-and-corner business (nevertheless, plenty of suits were bought at a shilling a week). Its growth between two wars went with the mass-production of cheap luxuries—gramophones, bicycles, radio sets; the first legislation to regularize it in this country was in 1938. The great boom in instalment buying came after the second war, however. Some idea of its extent is given by the banks’ statement of their loans to hire-purchase finance companies. The total in February, 1955, was £30,493,000, compared with £11,188,000 in February, 1954. The sum actually was greater, since many loans for general trading went mainly into hire-purchase; and in the same period several of the companies made capital issues.

Few shops finance their own hire-purchase trading—in fact, only the very big ones. Most of them borrow from hire-purchase credit companies, which often buy the goods themselves, receive the instalments themselves, and leave the shopkeeper as little more than an agent. There are several organizations for checking on prospective buyers. Every hire-purchase customer has his particulars filed (including how he pays); investigators discover all they can about him, and the information is filed for future reference. In America, according to a recent Picture Post article, the files include; “. . . intimate details and frank character assessments. Facts include positions and salaries of all members of a family, bank balances, litigation records, all past time buying deals, estimates of business or professional prospects, value of house or mortgage position, or amount of rent and how paid, local reputation and probably social habits. Police records are included.”

Hire-purchase buying is dear. It has to be. There are the book-keeping and the postage and the enquiry fees and the advertisements (last year the Gas Council and Hoover Products each spent about a quarter of a million pounds on advertizing); the “free” maintenance is really, of course, covered in the cost. The rates of interest range from five to ten per cent. At least, those are the nominal figures: calculated on a diminishing debt they are much higher—over two years, the usual period for furniture, they actually average out at something like 20 per cent. The number of bad debts is said to be small, and hire-purchase firms try everything before resorting to court action, which usually is fruitless for them.

Outside the main stream of instalment trading, there are innumerable related concerns; for example, the cooperative societies’ “mutuality shares,” where vouchers are issued to be exchanged for all sorts of goods. Then there are the clothing clubs, and a host of door-to-door easy-payment salesmen—many of the latter charging rates of interest which are exorbitant even by hire-purchase standards, and having no advertizing or accounting costs to speak of. Incidentally, cars do not figure in hire-purchase as much as would be imagined; most are bought by bank overdraft and re-mortgaging houses.

From the economists’ point of view, instalment buying is simply the form taken by the demand for certain sorts of goods today. Thus, when the number of new contracts fell last year in America, the Government hurriedly urged traders to get things back to normal. And in this country the recent restrictions on hire-purchase were headlined by the Manchester Guardian as “Plans to Limit Demand for Goods.” A fair enough estimate; with the minimum deposit raised to 15 per cent., the demand for furniture has fallen to not much more than half what it was a year ago.

To see hire-purchase as something which—vide Fyfe Robertson in Picture Post—"puts real wealth, which otherwise would not be acquired so quickly, into consumers’ hands and raises living standards,” is to grasp flight appearances, however. It is easy enough to point to all the television sets, but television is only the newest replacement for the piano, and pianos were a far greater luxury in their heyday. Before the wireless era, one cost as much as a television set today—that is, anything between £40 and £70, at a time when money wages were much lower.

But to consider living standards in terms of luxuries is to succumb to advertizers’ patter. The fact is that working people obtain luxuries only at the expense of other things. How can a family with £8 a week get them otherwise? The other things may, of course, be minor luxuries themselves—drinking, pictures, smoking; a small boom in smoking cures has accompanied the big one in hire-purchase. They may, on the other hand, be necessities—food and clothing; or the “solution” for a good many families is the wives’ going to work. Whichever way it is, there is not much to confirm the idea of better, more gracious living for the working class.

“Luxuries” is the wrong word, anyway. There is nothing luxurious about buying clothes by instalments, knowing they will be half worn-out before they are paid for: “pay as you wear” has the sound of eternity. True, furniture is more durable—it is outmoded instead of wearing out in two or three years. A favourite sneer of precious suburban aesthetes is that working people lack taste. An ignorant untruth, as the beautiful little gardens in the dingiest surroundings show; but in any case, there is no scope, for modishness when things are bought over two years to last for 20. Most people, in fact, buy furniture only once in their lives—as the hire-purchase advertisements, with their single-minded appeal to the newlywed testify.

Probably the best example of this sort of thing is the way in which television sets have superseded one another since the war. Each latest model, gaining its owner the maximum of prestige, has been rendered inferior long before the final payment. There cannot be much feeling of luxury about having given up smoking to buy a set with a nine-inch screen five years ago and finding it primitive by today’s 17-inch standards.

The truth is that hire-purchase is a monument to poverty, not a pillar of prosperity. People can buy more things, by whatever method, only if they have more money. For a year or so after the war there was no hire-purchase; it began as the briefly spectacular spending of the gratuity era faded. It is hard to believe that anybody enjoys paying instalments—indeed, these commitments add to the tension of modern living. There is no alternative except going without, however. It is all very well to think people can save up to buy, but it doesn’t work out like that—and in any rase, it means going without just the same. The rise of hire-purchase and the decline of the pawnshop are probably not unconnected.

The average gross wage of male workers today is just under £9; for women, it is just over £5. According to the Chancellor of Exchequer in November last year, there were 8,600,000 receiving less than 96s. a week. Compare those figures with pre-war ones, remembering the cost of living today as 2 1/3 times what it was in 1938. In that year, 63.2 per cent, of the families in Britain received under £5 a week, and 11.8 per cent, between £5 and £10. About the same time, John Strachey did some calculations—slightly tortuous, admittedly—in “The Theory and Practice of Socialism” to show that “the real earnings of the working class in 1934 were only 91.1 per cent., of what they were in 1900.” The only conclusion is that the buying power of working people is much the same as it has always been—small; hire-purchase is the latest manifestation of the smallness.

One other aspect of hire-purchase needs to be mentioned. It helps to discipline the working class. The man with heavy commitments—or the American worker who values his “credit rating”—is the man who must keep his job at all costs. Bernard Shaw’s Andrew Undershaft preferred religious workmen because they were sober and honest and amenable; nowadays his ideal would be the employee buying a dining-room suite. The recent Government Economic Survey mentioned that more than a quarter of industrial operatives worked overtime last year, and it is a sad but fair comment that more than a quarter probably want to work overtime this year, too.

Ours is the age of mass-production. One would imagine it to be an age of plenty, but it is not so. It is a queer reflection that, in this world of science and power, the majority of people have to buy trashy products bit by bit and perhaps abstain from necessities in the process. Profit is often imagined as the greatest incentive to progress; in reality, it is the fetter. The hire-purchase system is a fresh pointer to the outstanding contradiction of capitalism: the inability of a productive system which has industrialized the world to perform the only real function of production—the satisfaction of people’s needs.

Robert Barltrop

Cooking the Books: Rating the Bank Rate (2022)

The Cooking the Books column from the December 2022 issue of the Socialist Standard

The Bank Rate has gone up to 3 percent. What does it mean? As the rate which the Bank of England charges or pays the high street banks, it affects the rate that these charge or pay their customers. Those who borrow from them will have to pay more and those who save with them will be paid more on their savings (the first much more quickly than the second).

The Bank of England makes a wider claim. According to its website, this is ‘how changes in Bank Rate affect the economy’:

‘A change in Bank Rate affects how much people spend. And how much people spend overall influences how much things cost. So if we change Bank Rate we can influence prices and inflation. We aim to keep inflation at 2% – this is the target set by the Government (…) Overall, we know that if we lower interest rates, this tends to increase spending and if we raise rates this tends to reduce spending’ (BoE as at 7 November 2022).

The theory is then that if the Bank Rate goes up, people will spend less; a higher interest rate means that those trapped into a mortgage have to pay more to their bank or building society and so have less to spend on other things, the same goes for credit cards; and, since the interest paid on savings goes up, people are attracted to save more and so have less to spend. The overall result will be less spending on consumer goods and services, which is expected to reduce the rate at which their price goes up.

But does it work? Could it work? By ‘inflation’ they mean a rise in the consumer prices index which is a measure of how the prices of a typical basket of goods and services bought by a typical consumer change. So, the claim is that a change in the rate of interest can change the way the economy works by increasing or decreasing the overall amount people spend on buying consumer goods and services.

This might make some sense if the purpose of capitalist production was simply to meet the paying demand of consumers, but it isn’t. It’s to make and accumulate profits to be re-invested as more capital. What drives the economy is what businesses invest, not what consumers spend. This primarily depends on the rate of profit rather than the rate of interest, and that is not something that the Bank of England can affect. Small businesses, dependent on modest bank loans, may be influenced by a change in the Bank Rate in the same sort of way that consumers are supposed to be, but Big Business is typically not.

Big Business is, if anything, more interested in the prices of producer goods, intermediate goods such as materials, parts and energy, used in the production of other goods, which the Bank of England doesn’t even claim to be trying to affect. In fact, the level of consumption is more affected by the level of business investment than it is by the Bank Rate since when business is booming consumption goes up and when there’s a slump it goes down.

Nor does there seem to be much evidence that changes in the Bank Rate do have the intended effect on consumption. In his 22 October blog Michael Roberts quotes a study which concludes: ‘It is difficult, however, to find empirical evidence that households do indeed raise or lower consumption by a significant amount when interest rates change.’ But, even if they did, it is difficult to see how this would affect the general price level. The Bank of England could only do that by inflating the basic money supply.

Proper Gander: Super marketing (2023)

The Proper Gander column from the September 2023 issue of the Socialist Standard

What’s the difference between Wagon Wheels and Cart Wheels? About 10p a pack and the colour of their packaging: Cart Wheels are Aldi’s cheaper version of the perennial chocolatey snack, which original maker Burton’s insists hasn’t shrunk over the decades. The differences – and similarities – between established brands like Wagon Wheels and supermarkets’ counterparts were the subject of Channel 4’s Secrets Of The Supermarket Own-Brands. Presenter Denise van Outen checks out the products lining the aisles, and chats with various experts to reveal how supermarket own-brands are more than just slightly inferior copycats of ‘proper’ brands. How they are marketed is as important as how they are manufactured, and the documentary only has enough time to outline some of the methods used to flog us one variety of comestibles over another. With its jaunty music and bright colours, the programme is pitched as a cheeky nudge to be more shopping savvy rather than a hard-hitting exposé of a racket. Despite this, it highlights how much we’re manipulated not just in what we buy, but also what we think we’re buying.

Most supermarkets have at least three ‘tiers’ of own-brand goods: the cheapest ‘budget’ range, the standard one which just undercuts the ‘proper’ brands, and the ‘premium’ one with the swankiest wrapping. Traditionally, ‘budget’ ranges were packaged in an obviously no-frills way, with the apparent cheapness of the design echoing the lower price. A tin of Tesco’s Value baked beans with its stark blue and white stripes looked quite unlike a can of Heinz Beanz. Strategies started to change around 2018, by which time discount chains like Aldi and Lidl had established themselves in the marketplace. Since then, ‘budget’ supermarket own-brands have been more likely to ape the packaging of their branded counterpart, such as Cart / Wagon Wheels and other favourites like Hula Hoops and Robinson’s cordials. Often, the branding will barely mention the supermarket and instead go for an image that suggests a homespun, small-scale producer, such as Sainsbury’s Stamford Street or Tesco’s Stockwell & Co. Both strategies disguise that the products are ‘budget’ own-brands, although the ‘premium’ ranges, such as Sainsbury’s Taste The Difference, aren’t shy with mentioning the shop. All this suggests that supermarkets no longer want their name to be associated with cheapness, even though cheapness is what more people are after since prices rocketed. Still, the strategies are doing what they’re supposed to, proven by how supermarkets generate more profits from their own-brands than from branded products.

The way that own-brand goods are manufactured is planned to maximise profits by minimising costs. Richard Crampton, Sainsbury’s Director of Fresh Food, admits that sometimes the three ‘tiers’ of their own-brand products, from ‘budget’ to ‘premium’, are all made in the same place. One example is their own-brand stuffed pasta, with each range distinguished from the others by slight variations in their recipes ‘enhancing that product’ to the ‘same high standards’, enthuses Crampton. There are also more similarities in the content of branded and own-brand goods than we might expect. For example, Hula Hoops and their replicas are both produced in the same crisp factory, albeit with varying ingredients or processes. And the six most well-known brands of washing powder are made by only two companies, with nearly all own-brand ones manufactured by a third. The diverse range of brands for what boils down to similar products by a few producers gives only an illusion of choice, one of capitalism’s hallmarks.

The companies get away with this because of how their branding strategies are underpinned by an understanding of psychology. One state of mind which they aim to encourage is loyalty to a particular product. We’re most likely to stick with ‘proper’ brands for toiletries, beauty products and cleaning materials, no doubt reinforced by their advertising campaigns which can ‘shout louder’, according to retail expert Miya Knights. While there’s more competition between own-brand and branded food and drink, some long-established names have maintained their loyal followers, such as Coca Cola. The documentary features YouTube food reviewers the Smythe family, whose parents resolutely only buy Coke. However, the predictable result of a blind taste test is that they mistake Lidl’s Freeway cola for ‘the real thing’, showing that the brand they adhere to isn’t as distinctive as they assume.

A related point was made when Denise and brand psychologist Jonathan Gabay set up a street stall to hand out Magnum-like ice creams to passers-by. Some are promoted with a snazzy image and an elaborate back story about how the ice cream gets churned, and others are only announced with the word ‘Aldi’ written in felt-tip. Even though the same ice cream was given out throughout, those which came with the sales pitch were thought to taste better than the ones without, even once the hoodwinked recipients were told the truth.

The two experiments show us how much our preferences, for food in this instance, are shaped by how they are commodified. A small number of producers have dominated the market by finding the most cost-effective ways to manufacture our more popular fodder. Tweaking the details of a basic recipe creates versions of the product which can be pitched to customers grouped by levels of spending ability. This lack of real choice between ice cream, cola or pasta is disguised by varying the branding, either a little or a lot. At its most manipulative, branding can even impact on how appetising we find the product, when we associate its image with good taste. Throughout, money dictates how this process plays out, in the costs of manufacturing and marketing, and then in the sales which turn into profits for the owners. The way that commodification moulds what we consume is inescapable in capitalism, of course, not just in what we use but also what we watch. Secrets Of The Supermarket Own-Brands itself was interspersed with glossy adverts and sponsored by a big name brand.

Mike Foster

Cooking the Books: The limits to tax and spend (2021)

The Cooking the Books column from the October 2021 issue of the Socialist Standard

‘Raising tax on businesses will kill off investment, CBI says’, was the headline in the Times (11 September) about a speech to be delivered that day by Tony Danker, the Director-General of the employers’ organisation, in which he said:

‘I am deeply worried the Government thinks that taxing business… is without consequence to growth. It’s not. Raising business taxes too far has always been self-defeating as it stymies further investment’ (Link).

He would say that, wouldn’t he? Yet businesses have to be taxed, whether directly or indirectly, to pay for the upkeep of the government and the services it renders them as a whole. Capitalist enterprises recognise this and Danker himself qualifies his statement by saying that it is raising tax ‘too far’ that risks discouraging investment.

He does have a point. There are limits to how much tax governments can raise from businesses. The capitalist economy is driven by business investment for profit and, if governments tax too much, this will provoke an economic slowdown or even downturn. It is something Keynesians learned the hard way but which has yet to be learned by the ‘Modern Money Theorists’ and the Green New Dealers.

Danker went on to make another point:

‘It’s clear that consumption is likely to rage in the short run. Consumers have saved and will spend… But unless investment catches up, rather than falls behind, that story will be short lived’.

True again. If investment doesn’t pick up, the post-lockdown consumer boom will peter out when all the pent-up demand has been spent.

We don’t suppose that it will contribute to Danker’s ‘rage’ in consumer spending, but if you live in Northern Ireland you’re lucky. Well, sort of.

The devolved administration there is giving away £100 to anyone who claims it under its ‘High Street Voucher Scheme’. Actually, it’s not a voucher that they will be given but a plastic card with £100 pre-paid on it which they can use in local shops and eating places to pay as they would with their bank card. The money has to be spent by the end of November.

It is not exactly the ‘helicopter money’ that some economists propose as a way to get the economy out of a recession. Not that that would work anyway since what drives the capitalist economy is not consumer spending but business investment, as the CBI’s Director General pointed out. The aim of the scheme is simply to support local businesses. It will to a certain extent.

When Marxists hear the word ‘voucher’ they tend to think of the Labour-Time Voucher Scheme that Marx mentioned in passing a couple or so times. Under this, people, in the early days of socialism, would be issued with vouchers based on the amount of hours they had worked and which they could redeem for consumer goods at the local distribution centre. It wouldn’t have worked and Marx didn’t go into any detail (it wasn’t his idea anyway) about how the goods to be redeemed would be ‘priced’.

In any event, given the tremendous development of the forces of production since his day, socialist society should now be able to go over very rapidly to free access and free distribution and there would be no need for vouchers. Or plastic cards.

Cooking the Books: Consumption – not the driver (2020)

The Cooking the Books column from the August 2020 issue of the Socialist Standard

Interviewed on the Andrew Marr Show on 14 June, the Chancellor Rishi Sunak stated that the economy was ‘driven by consumption’. It is understandable why he might think this since consumption (consumer spending) accounts for some two-thirds of GDP. But it does not follow that it is therefore this that drives the economy. In fact, it isn’t.

Apologists for the system claim that under capitalism ‘the consumer is king’; that, in other words, production is carried on – even initiated – in response to what consumers want as indicated by what they are prepared to pay for and do pay for. But this does not explain how consumers come to have money to spend in the first place.

Most consumers are wage and salary earners who get their spending money from the sale of their capacity to work at a particular job, their labour-power, to an employer. So, where do employers get the money to pay them from? It’s a part of the capital they must have to start up a business and keep it going. Marx divided the capital of a business into constant capital (plant, machinery, raw materials, power, etc) and variable capital (the money to pay the wages of the productive workers it employs).

Under capitalism production is initiated by capitalist firms seeking to expand their capital by making and accumulating profits. It goes like this. Capitalists invest in production, including hiring workers; workers exercise and use up their labour power to produce new value, including the value of their labour power; capitalists pay workers as wages the value of their labour power; workers spend their wages on buying what is needed (food, housing, clothes, entertainment, holidays, etc) to recreate their labour power to replace what they used when they worked; capitalists buy the renewed labour power; and so the circuit recommences.

Marx put it this way:

  ‘From the point of view of society, then, the working class, even when it stands outside the direct labour process, is just as much an appendage of capital as the lifeless instruments of labour are. Even its individual consumption is, within certain limits, a mere aspect of the process of capital’s reproduction … Individual consumption provides, on the one hand, the means for the workers’ maintenance and reproduction; on the other hand, by the constant annihilation of the means of subsistence, it provides for their continued re-appearance on the labour market’ (Capital, Volume 1, chapter 23. Penguin edition p. 719).

What this means is that what workers buy to consume is the reproduction of what variable capital is invested in. Capitalist apologists speak unashamedly of workers as ‘human capital’. Some Marxists describe workers’ consumption as variable capital. This is not strictly true (it’s only that both have the same value) but it gets over the point that workers’ consumption is a part, not the initiator, of the circuit capital goes through to increase its value.

What drives the economy is business investment for profit. This depends on the prospects for profit-making and goes up or down depending on whether these are good or bad. Less business investment means fewer workers employed and so less consumption; more business investment means more consumption. So, far from consumption driving the economy, it’s the other way round. Consumption is the tail not the dog.

Christmas —the great delusion (1965)

From the December 1965 issue of the Socialist Standard

Christmas, we shall be told again and again during the next few weeks, is for the children. There is, of course, another side to it, represented by the flood of gaudy rubbish which fills the shops, the big campaigns to sell it, and by the tinsel of nonsense with which the whole thing is embellished. This is not so romantic a vision as that of innocent, starry-eyed kiddies hanging their stockings by the chimney—and it suggests that, whatever enjoyment children may get out of it, Christmas is for a few other people as well.

As the City columns, the advertising agencies, and the trade statistics make clear, Christmas is that thing so beloved of a section of the capitalist class—a spending spree. Millions of people save up, perhaps for the entire year, for this one great splash-out. This is the time when savings vanish, bonuses are blued, hire purchase debts cheerfully taken on. These debts have partly replaced the old loan clubs, which used to have their big pay-out at Christmas. In fact, hire-purchase does no more than the clubs—it simply moves the payment date from one part of the year to another, but this is enough to make it one more piece of evidence for those who are trying to prove that we are all so much better off nowadays.

Christmas is responsible for an amazing expansion of the retail market, lasting for about a month at a time when trade would probably otherwise be slack. For example, the sales of one suburban branch of a famous retail chain bound up to around thirty thousand pounds on Saturdays during December; the manager can almost forecast what his sales figure will be for each weekend. These sales are in the established, non-seasonal goods such as clothes, which simply become more hectic during the Christmas rush. There are plenty of other examples, as people determinedly smoke more cigarettes, eat more food, and of course drink more alcohol during the space of a couple of days than they do in a normal week.

Apart from the established trades, there are the seasonal sales, with an appeal confined exclusively to the Christmas period. Christmas crackers, for instance, are being turned out all the year round; even the men who compose those dreadful jokes and mottoes are hard at it months in advance. The result of all this is that about one hundred million crackers are sold at Christmas, some of them abroad.

We must not forget Christmas cards. The first of these was sent in 1843; the idea did not catch on for about twenty years and since then the market has steadily expanded until now something over six hundred million cards, worth about 15 million, are sent each Christmas. This is good business for the firms which make the cards (one of whose executives said a little while ago “We are in the sentiment business”) and for the Post Office, who rake in something like £8 million in postage on the cards, not to mention the extra revenue on Christmas parcels, greetings telegrams, 'phone calls and the rest.

It is anyone’s guess, how much of the spending at Christmas goes in a genuine effort to have, or to give someone else, a good time. A lot of the drinks, presents and smokes are sent as bribes (there is no other words for it) from the directors of one firm to those of another which, they hope, will buy their products. A host of calendars, diaries, packs of cards, are produced as advertising material. Some Christmas cards are sent out by firms as reminders that they are still in business—and magnificent pieces of work some of them are.

Apart from the business world, there is no doubt that a lot of money is spent at Christmas in an effort to impress other people. We have all seen—perhaps some of us have actually received—those Christmas cards which have so obviously been selected with the motive of convincing us that the senders are more wealthy and important than they actually are. We have all read the advertisements which say that no card is really gracious unless it has the senders’ name and address printed on the inside. It is an unpleasant fact that the acquisitive nature of capitalism gives strength to this sort of appeal; for those who fall for it, sending Christmas cards is a highly competitive business, in which a defeat has to smoulder for a whole year before the chance for revenge comes round again.

The fact is that Christmas is in some ways a time for people to show their less attractive side—and for the massed forces of commercialism to cash in on the situation, ruthlessly and to the full, with the only justification they need—in the end they have more profit than if they had not played up to peoples’ snobbery, their insecurity and their distorted conception of the world in which they struggle to live.

In other ways, too, commerce turns the screw at Christmas. A walk around any department store reveals an astounding variety of junk which is being sold at equally astounding prices. There are toys which are dangerous, or which will not last from Christmas to Boxing Day in the hands of any child. There are cakes of soap and bath cubes, stuck in a fancy box and covered in cellophane, selling for much more than their usual price. There is a bewildering mass of tinsel, plastic and coloured paper—and all the time there is the drive to sell, sell, sell for a Merry Christmas.

Yes, this is an enormous, briefly inflated, market; each year the note circulation leaps up to accommodate it. (Last year it increased from £2,583 million in the first week in November to £2,766 million in Christmas week.) The firms which hope to cash in on the boom lay their plans a long time ahead. From the summer months onwards, they are discussing and deciding on their advertising campaigns, their special wrappings and what they like to call their “presentation”. There is always the temptation for them to try to get in first, which they have to resist for fear of opening their campaign too early. But none of them can afford to leave it too late—they have such an awful lot to sell. So it is not uncommon for us to be able to buy Christmas decorations, wrappings, cards and so on in October; and before Guy Fawkes night there are not a few big stores with their Father Christmas, usually an unemployed stage extra, to induce people to buy by working on their children.

Many people complain that the Christmas sales campaign starts too early. But as the market is stimulated to grow, and as it grows, so will the effort to exploit it. This might mean an even longer sales drive in the future—wasn’t there a story about a business man who said that Christmas was good business as long as they kept religion out of it?

He must have been an ungrateful fellow; religion, after all, does him many a good turn. In any case, as we point out elsewhere in this issue, Christmas has nothing to do with Christianity; the Christians simply pinched it to suit their own purposes. What more natural, then, than that the capitalist social system, which is so faithfully supported by Christianity, should itself adopt Christianity’s most important festival for its own ends?

It was the Industrial Revolution which was responsible for reducing the old twelve days’ holiday at Christmas to a single day. The rise of capitalism meant that masses of people sold their working ability to the master class by time—and time spent on holidays was time not spent producing the masters profits in the factory or the mill or the mine. Capitalism, with the help of its religious lackeys, built up a massive condemnation of what it called idleness. And among other things it destroyed the ancient Twelve Days of Christmas.

More recently, capitalism has reduced the opposition to Christmas to a handful. Nobody now holds the opinion expressed in a Puritan pamphlet of 1656, that Christmas was ". . . the old Heathen’s Feasting Day . . . the Papists’ Massing Day, the Superstitious Man’s Idol Day . . . Satan’s That Adversary’s Working Day” but until fairly recently there was a solid, articulate opposition to it. This is now all but silent, as the festival has been blown up into a vast, commercialised orgy of selling and consumption, one of the many working class Festivals of Delusion.

The great Delusion of Christmas is that dormant within us there is the Christmas Spirit—a gentle compound of benevolence, co-operation and goodwill which is roused at this time of year by the appeal of religion. When we are possessed of the Spirit we are wise and generous and loving; if only (says the Delusion) we could keep it up all the year round the problems of the world would be solved. If we would only cast out the Scrooges among us (and we all have our own idea of who Scrooge may be) and live by the Christmas Spirit there will be no more poverty, or war, or oppression.

This is no joke; the Delusion is powerful. It brought both sides out of their trenches to fraternise in No Man’s Land in 1914 (officially, that was the last time they did it). It inspires countless maudlin speeches at office parties and family gatherings. It runs through the entire Queen’s Speech on Christmas Day. It is powerful—and it is dangerous.

For the Delusion fosters the idea that the troubles of capitalism are caused by anything but the essential nature of the system. It promotes the nonsense that the world today is a fearsome, disturbed place because people are bad and that if only people were better the world would be a better place. It encourages people to think in terms of good and bad spirit, when they should be asking themselves why they behave as they do, and why the world is as it is. And as a final irony, the Christmas Delusion even encourages some people to think that there is something inconsistent in the determined way that capitalism exploits Christmas for all it is worth.

To start at the right end of this problem, we should first of all realise that there is nothing essentially wrong (or right, for that matter) with most people. It is the conditions of living and working under capitalism which largely make them what they are. Capitalism is constantly working out ways of exploiting us more efficiently, which means more intensely. It is always pushing us that bit harder, crowding us in that much more, making us into that much more of a cut-throat in the competitive scramble for the better job, the bigger house, the easier money.

In these conditions, people live at an intense pressure. Events which in themselves are trivial—a telephone which rings, a child who behaves like a child—are an intolerable strain. It is only when we relax, when we put aside the worry of making ends meet, when we try to live like human beings, that we begin to get a better perspective on it all. Perhaps this is what a lot of people do at Christmas. Some of them, for a couple of days at any rate, actually succeed, and they put it all down to the Christmas Spirit.

The big laugh about this—if anyone can stand another joke at this time of year—is that if the working class really grasped the implications of this they would take a hard, sober look at capitalism and see it for the wretched way of living that it is. That old chap Scrooge had a word which aptly describes the delusions of capitalism, its cynicism and its hypocrisy. Humbug.

Ivan

Big stamp wrangle (1964)

From the March 1964 issue of the Socialist Standard

The biggest battle for a long time is now being fought in the retail trade in this country—and all, on the surface, over a little piece of green, or pink, or gold, sticky paper called a Trading Stamp. Yes, on the surface. The real cause of the battle is to be found much deeper than any newspaper cares to dig.

Trading Stamps have been going in this country for a long time with Green Shield, a British company, having the big hold. But the stamps were mainly confined to small shops; they had no really big retail organisation to issue them. What started the present fuss was the decision of millionaire Garfield Weston (ABC, Fine Fare Supermarkets) to issue the American Sperry and Hutchinson pink stamps in his supermarkets.

This started a flood of stamps, among them another American concern — King Korn — and another British Super Yellow, owned by the same John Bloom who has made a lot of money out of direct selling washing machines. One gimmick followed another — Mr. Weston, for example, had glamorous pink-coated hostesses outside his supermarkets dishing out the S.H. gift catalogue.

Sperry and Hutchinson have been going for a long time—since 1896, to be exact, and have been in England, looking for an outlet, for over a year. They claim forty per cent. of the £300 million trade done in 275,000 retail shops in the States and have 280 redemption shops where their stamps can be exchanged for what are called gifts. The man behind them is Mr. William Sperry Beinecke, who says that trading stamps are no panacea for the retailer but only a promotional tool to help his sales.

Ranged against the stamp firms are some of Britain's retail giants Boots, W. H. Smith, Sainsburys, and so on. Labour peer Sainsbury, who has hundreds of shops, is spending some £50,000 in a campaign to thwart the trading stamp firms. Sainsbury opposes the stamps because, he says, they are wasteful and in the end lead to higher prices. And, of course, because they are "unfair competition.” He is doing his best to persuade the Labour Party to make the matter one for legislation.

On the side of the big retailers in the battle is the shopworkers’ union— USDAW, whose executive committee, in the name of their 350,000 members, say that trading stamps are against the interests of shops and stores, employees and consumers and that in the end the nation (by which they mean you and me) will bear the added burden of the cost of the stamps and gifts and the labour involved in producing and checking them.

Mr. Garfield Weston, for his part, protests that he would not do anything which was against the public interest and so is determined to carry on his sales drive with what he hopes will be the help of the stamps.

The printing and distribution of hundreds of thousands of gift catalogues alone costs at least £2 million; it is this sort of cost which Lord Sainsbury says will be passed on to the customer. The Progressive Grocer Magazine figures that trading stamp amount to fourteen per cent, of a retailer's operating costs and that he has to take this into account when setting his prices.

Frank L Chavia in his book Supermarkets, published in 1961, writes:

  “Selling Operations". Stamps are generally at the rate of one stamp for each 10 cent purchase. For a supermarket to use this promotional tool successfully certain prerequisites must be met.

1. The (user) shop should be part of a group of different stores reasonably close to each other geographically. All should handle the same stamp with the super or a departmental store as the centre of influence.
2. Stamps are promotional: customers must be encouraged to save them and associate the stamps with that particular store.
3. Stamps must obtain and hold additional volume, while the volume increase varies; at least 10% increase in sales is needed to break even on the stamp cost.
4. The super must be able to handle added volume without materially increasing the overheads.
5. Stamps are not a panacea for supers whose quality and type of service are inferior to those offered by competitors.
6. Stamps do not permit much if any, independence in pricing.

Now it is obvious that the retailers who have taken up the stamps have not done so, so that they can give the housewife a brand new set of saucepans or any of the other “gifts.” They hope and expect to increase their profits through the stamps and this need not come about by a simple rise in their prices. What they say they are aiming at is to increase their turnover and by this means to increase their profit. One of the stamp companies’ press adverts claims that, in retaliation, some anti-stamp retailers have had to cut prices and that therefore the ultimate winner in the struggle is the consumer. In this sort of advert it is always the consumer—and never the shareholder—who wins.

In fact, trading stamps, like the checks, coupons, premiums, samples, contests which have all been well tried in the past are part of the jungle of capitalism's competition. And competition will only bring prices down when there is an overall excess of the supply of a commodity over the demand for it. The fierce competition between the grocery retailers did not, for example, prevent the increase in the price of sugar last year.

The process of profit making is basically quite simple. The capitalist class, who own the places and the materials which go to produce and distribute wealth employ the working class. The labour of the working class produces the wealth; it builds the shops, produces the groceries, transports them. The workers serve in the shops, they take the cash at the counters. In this process they are exploited simply because, in terms of a commodity’s value, they contribute more than they get back in wages. When their labour is done the commodity they have made or handled has a higher value than it had before. It is from this higher value that the employer—the industrialist, the retailer perhaps—gets his profit.

This profit often has to be shared with other capitalist concerns—with advertising agencies, insurance companies, banks, landlords. And sometimes with a “gimmick” concern like the trading stamp companies. In the competitive rat race the capitalists get headaches, and worse, in trying to outwit and outsell each other. Some retailers may try simple low prices—like Salisburys and Boots. Others may fall for the wiles of the stamp trading companies. In this they are creaming off some of their profit, sometimes in the hope of making a larger overall profit—and sometimes merely to survive.

The working class are as passionately divided in this struggle as are the competing retailers. Some of them like the stamps—they like sticking them in, they get a kick out of their “free gift.” Other workers think that the stamps are a dishonest gimmick. Yet if they will all take a deep breath and have a good think about it, what would they find? Why. that whether they collect stamps or not, and whether prices go up or down, they still only just manage to get by on their wage. When they have paid the landlord and the grocer and the H.P. man, when they have put a bit by for their holiday, and when they have paid for all the other necessities of life, there is precious little left.

As long as the working class are deluded by the gimmicks of capitalism—in all their many shapes and sorts—there will be no end to them. Perhaps some enterprising firm will try white balloons next. For saving so many white balloons you can get so many black stamps which you can exchange for so many pink discs which you can swop for . . . and so on, and so on, until they get wise to it, and it dawns on them that a better, saner way of making and distributing humanity's wealth is so that it is strictly for use instead of for sale and letting all human beings have free access to it.

Joe McGuinness

The Passing Show: Continued . . . (1) (1967)

The Passing Show column from the March 1967 issue of the Socialist Standard

Continued . . . (1)

Last month, we published an article on British capital in India, and mentioned the nice fat rake off which U.K. capitalists are getting from the exploitation of the Indian workers. We exposed the myth of foreign 'aid’, and pointed out that money spent in India by foreign or native capitalists was for the good old-fashioned purpose of realising a profit.

This is not the impression which governments try to foster, of course. To listen to the bleats of our statesmen, you could be forgiven for thinking that investments abroad are an act of gigantic generosity, aimed only at uplifting the native workers in a land starved of home-grown capital. But this does not explain why the Indian ruling class have done so nicely out of the transactions, and their workers have remained so desperately poor.

In fact, the Indian capitalist class, who have been talking for some time about massively increasing their share of the world export market (see this column October last), now look like taking a leaf out of their foreign competitor's books. They have begun to invest abroad —in Great Britain of all places. A report in The Sunday Times of January 22nd, informs us of an asbestos-cement products factory to be set up near Edinburgh by Birla Bros of Calcutta.

The plant and machinery, costing about £300,000, is being shipped from India. The factory will employ about sixty people, all of whom will be recruited locally.

It is described as the first major Indian investment project in Britain, and no doubt it will be followed by others, part of the development pattern of any capitalist class sooner or later, in its search for suitable fields of re-investment abroad. Possibly some of the profits from British investment in India could be used in the same way. Having been obtained in the first place from the exploitation of British workers, they then play their part in the same process in India and elsewhere, and the profits which subsequently accrue could find their way (at least in part) back to Britain, to continue the sordid business.

It's an ironic and sobering thought, and supports a contention we have always held; that capital exists to exploit the working class, not uplift them. The capitalist class of any country will not be particularly fussy about patriotism when it comes to grabbing a profit. They spend their money in any country so long as a profit is forthcoming.


Continued . . . (2)

It seems that hardly have we uttered some words when they are out of date, or at least need supplementing. In ‘Thoughts on Youth and Age’ (last month) we drew attention to the importance of the teenage market to the capitalist class, but we never gave a thought to that of the ‘pre-teens'. And now, The Observer colour supplement (5.2.67) has beaten us to it. “Big business . . .  has discovered that the little mites are big spenders”, says a report by Ruth Inglis.

In America, for example, the market is estimated at £360,000,000 a year. No comparable figure has been worked out for Britain, but all are agreed there’s quite a bit of pocket money to be mopped up there too. So our rulers are not over-squeamish about the ‘innocence’ of childhood, and all that rot. From books to Batman shirts, they will compete for the schoolkid’s half-crown, and where possible will try to bolster demand, perhaps by sophisticating tastes; one cosmetics firm is going to bring out a range of lipsticks for the girls.

Ruth Inglis expresses surprise that “business men in this country too, are starting to discover and exploit the pre-teen market.” But we do not share her astonishment, because you cannot expect capitalist society to work any differently. Everything gets defiled sooner or later. It’s just a matter of trying to guess where the next blow will fall. And just in case you got the impression from our February article that old people have been written off as a market, take a look at some of the adverts in The Pensioners' Voice sometime. They’re even after the few bob you get when you’re on the scrap-heap.


H.R.H.

The Duke of Edinburgh’s image—no doubt cultivated assiduously by the publicity boys—is one of an ever-youthful, ever-witty man, ever-pertinent in what he says. It is an ever-irritating picture.

But in his role of glorified travelling salesman for the British capitalist class (‘merchant prince’ he recently called himself), he generally says what is required of him. He must be careful to push Britain’s interests while beaming good humour and making harmless ‘funnies’ on the side. Just occasionally, he might overstep the mark, such as he did two or three years ago when he told us all to ‘get our fingers out’ and work harder. But it passed off without any great fuss, and H.R.H. is still making speeches, probably as many as the Queen herself—or not far short of it anyway.

The Duke is a very useful speech- maker. the image of a modem ‘with it’ Royalty, and as we have said, faithfully echoing current British government thinking in his words. Like his effort on December 20th last at a dinner in Paris, held to celebrate the fiftieth anniversary of the foundation of the Association of France-Grande Bretagne. (Strange how these dignitaries like to lecture us from the banquet table; earlier he had been de Gaulle's guest at a luncheon in the Grand Trianon at Versailles). He pleaded that “we should have a strong faith in Europe, and confidence in each other, based on knowledge and understanding.” (Times 21.12.66.)

Now you can make what you like of that. Taken by itself it sounds like so much pious waffle, and doesn’t make any worthwhile difference to you and me anyway. But the British capitalist class are having another go at entering the European Common Market and the Duke’s words then fit into the general sounding out of their stubborn opponent. Hence also Prince Phillip’s later remarks:

 “Neither Britain nor any European country can stand alone in the world any more.”

More recently, there was what the newspapers liked to call that ‘hard hitting’ speech on February 9th, when he told five hundred leading British exporters how we are all in the soup together, and that all sections must co-operate to get out of it. There were other remarks, not particularly noteworthy for their originality, such as: “None of us has a monopoly of all the virtues, however much we like to think so.” Blowing his top, thought one paper, but again he said nothing more than what government spokesmen have been saying in one way or another for years.

Yes, a very faithful servant of the British ruling class, the Duke, and a man who takes an obvious interest in his job. Not surprising, though, is it? He’s about the only man in Britain whose interests are identical with those of his employers.

Eddie Critchfield

The Passing Show: Thoughts on Youth and Age (1967)

The Passing Show Column from the February 1967 issue of the Socialist Standard

When you’re in your teens. forty is such a long way off, you can't begin to imagine what your life will be like then. It seems such a great age, that perhaps you secretly think you’ll never reach it. And as for sixty, seventy or eighty — quite inconceivable. Yet the population of Great Britain is said to be ‘growing older’. That is, the proportion of pensioners to the rest is increasing— old people arc being kept alive longer than they used to be. So, capitalism permitting, the youngsters of today are the oldsters of tomorrow.

Now there's no particular virtue in being young or old, though some people (like Alan Freeman or Wilfred Pickles) may try to suggest that there is; "'Ave some respect fer yer elders!” was yelled often enough at children in the thirties, and ranks almost as absurd as that baffling commandment “’Ave some respect fer the dead!" hissed at us as we played our game of marbles in the gutter, oblivious of a passing hearse. Respect for the dead seemed a contradiction in terms, but as for our elders, perhaps they thought that survival alone in the days before the war justified their demand. Or was it perhaps the desperate clutching at something intangible—a last plea for some sort of recognition before the harsh world of capitalism turned its back on them for good?

In those days, little boys were still told to be seen and not heard, but that’s something we hear much less of nowadays, because little boys are not only seen, but are often determined to be heard as well. Why is this? Well, capitalism of the sixties differs superficially from that of thirty years ago. It’s as if the ‘age of youth’ has burst upon us like a storm cloud; every other advert features someone in their early twenties. “It’s great to be young and with it,” is the theme that’s hammered home, but not just for the sake of it. The ‘young' market is worth many millions, which it certainly was not in the old days. A 1959 survey by Dr. Mark Abrams, for instance, estimated that those between thirteen and twenty-five were drawing about £1,480 millions a year in wages. He mentioned the manufacturers’ ‘problems’ in trying to appeal to the (then) new market, and added that “. . . there is now a business as well as a moral and psychological necessity to understand young people”.

Which gives us our first clue to the reason for the post-war switch in values — if such they can be called. What with the technical developments boosted by the war and the labour shortage which has persisted in Britain more or less ever since, young workers are in demand as their parents seldom were. It’s your money they’re after, and to that end they will encourage you to speak your mind. You, Mr. and Miss 13-25, are the guinea pigs of their market research. In fact, as far as the manufacturers of certain types of goods are concerned, you are their market, and goodness knows how they’d get along without you now.

Add that to the undoubtedly greater importance of youngsters in the productive processes of capitalism, and the pace of modern existence with the accent on youthful fitness to withstand it, and it is not altogether surprising that the spotlight plays so persistently upon youth. Some think that the world is their oyster — that is, if they take too much notice of what the newspapers say. But it’s still very much a capitalist world, and the oyster is there for the lucky few, young or old, who own the means of life. Most boys and girls have to work for a living after they leave school, and that means the usual problems of getting by.

And what about the attitudes of the young towards modern society? Are they really such rebels, and do they differ in this respect so much from their elders? True, teenagers often do not see eye to eye with their parents on such matters as jobs, pocket money, sexual life, and so on (This last aspect of junior’s conduct is a constant source of horrified criticism; sour, grapes some say). Many have joined protest movements like CND, Anti-Apartheid etc. Their parents in the thirties joined the PPU, anti-fascist fronts and the like, and felt every bit as strongly about them.

Perhaps the outlook of youth can sometimes be called ‘unconventional’, but that’s nothing new. What matters is that it has never up to now been sufficiently unconventional to start questioning the very basis of our social system ; for it is the sad truth that objections to the Socialist case are much the same, whatever the age of the heckler at our public meeting. Young people generally accept capitalism, though like the rest of the working class, they kick against its effects at times. Professor F. Musgrove, of Bradford Institute of Technology, was nearer the truth than perhaps he realised, when he summed up the results of a survey in this way: —

No doubt there are youthful 'contra- cultures’ which support values which differ from, even invert, the values of the adult world . . .  But the broad picture of (Western) Youth highlights the continuities of outlook and belief between adolescents and their elders. (Guardian 22.4.66).

It is the Socialist who insists that the private property basis of society is the cause of the world's ills, and that only the common ownership of the means of life will end them. That is why our Party makes no false distinctions between young and old in its ranks —- the need for Socialist understanding is vital to everyone, irrespective of his age. Young people we are of course delighted to have join us, but there will be no segregation of them into a special ‘Section’, with all the sickeningly patronising attitudes so typical of the other parties. In the Socialist Party they have equal rights with every other member from the day of their enrolment.

We have tried to show that there is no intrinsic virtue in being young, old or anything else. The whole question must be viewed in its social context, and today that means within the bounds of capitalism, geared to the production of goods for sale, and the profit motive. Youngsters have become more important within this setup, while at the other end of the scale, old people rot out their remaining days on the scrapheap, though many of them could still make a valuable contribution to the running of a sane system. It would no doubt be a different story if the ruling class could find a way to use old age pensioners as a profitable source of labour power.

But capitalism is a wasteful and oppressive system for workers of all ages. It frustrates us at twenty, gives us ulcers at forty, and makes us apathetic and resigned at sixty-five, if we last that long. Of course there are many differences between young and old, and obviously their needs and capabilities differ, but it is capitalism which fosters the spurious divisions, and encourages animosities between various age groups. Whatever our age, we all have an overriding interest in the establishment of Socialism. Then, there would be no earthly reason that all of us should not be able to work harmoniously together, and in that sense forget our ages.

E. T. C.

Cooking the Books: Empty Hope (2010)

The Cooking the Books column from the March 2010 issue of the Socialist Standard

“Fresh blow to hopes of consumer-led recovery as squeeze tightens on pay” ran the headline of an article in the London Times (21 January) by Gráinne Gilmore, reporting on official figures for wage growth in the three months to November:

“Average pay excluding bonuses rose at an annual rate of 1.1 per cent for the period . . . Private sector staff saw no pay rise at all in November. . . Analysts said that companies were cutting workers’ hours and pay to try to limit redundancies . . . Colin Ellis, European economist at Daiwa Securities, said: ‘The lack of any pay increase in the private sector will weigh on consumption during 2010, much as weak wages have in Germany.’”

She didn’t say who was hoping for a “consumer-led recovery” but this was always an impossible dream. As should be clear from her report, consumer demand depends largely on what people are paid. In other words, it is largely made up of what wage and salary workers have to spend. Which depends on the level of employment; which in turn depends on what those who own and control productive enterprises (or who act for them) decide to produce according to what they think are the prospects of selling it profitably.

The economy, and its ups and downs, is not driven by consumer demand, but by capital accumulation, i.e. by profits being invested in expanding production. The ups and downs of consumer demand in fact reflect, not cause, the ups and downs of the economy. Paul Mattick put it well in his Marx and Keynes: “The business cycle is not caused by variations in social consuming power, particularly not that of the workers; rather the cycle determines these variations”.

When production is expanding so is employment and income from employment. Workers have more to spend and, on the basis of the assumption that their employment is secure, are able to borrow against future expected income and so can spend even more. Some economic observers, perhaps influenced by what they were mistaught in college about capitalism being a system of production for consumption, jump to the conclusion that it is this increased consumer spending that is causing the economy to grow. But this is an illusion. Consumer spending is booming because the economy is booming, not vice versa. This becomes clear when the economy stops expanding, as it did in the second quarter of 2008 and in fact began to contract. When this happened consumer spending fell too.

Consumer demand will never recover of its own accord. How could it? Workers can’t simply spontaneously increase their income. It will only revive when production and employment do. And that depends on the prospects of profitable production reviving. Which the squeeze on pay Gilmore reported on will in fact be contributing towards.

Capitalism is a system geared to profit-making, not to meeting needs, not even to restricted, paying needs.