Age Without Wisdom (1958)

From the August 1958 issue of the Socialist Standard

Workers Who Still Have Capitalist Ideas

As time passes the trade unions, and the Labour parties, become older and their policies change, but without any noticeable sign of having learned by experience.

These remarks are prompted by two recent events that would have appeared surprising 50 years ago. Earlier this year New Zealand farmers complained that they were selling less butter in this country because of cheaper butter coming on the market from several exporting countries, including Finland, Argentine and Ireland. After some delay the Government announced in the House of Commons on June 19th that they had approached the governments concerned and had got them to agree to reduce their deliveries of butter where this was not already happening. It was done deliberately to help the New Zealand exporters, although it meant that the price of butter here would go up. The first somewhat surprising event was that the T.U.C. supported the idea of helping New Zealand:—‘We decided to tell the President of the Board of Trade that we supported the New Zealand government’s request for anti-dumping duties.” (T.U.C. Report in What the T.U.C. is Doing.” Page 38.)

At the same time the Lancashire cotton manufacturers and the textile unions were pressing the government to help the depressed Lancashire cotton industry by restricting cheap imports from Hong Kong, India and elsewhere. And in the House of Commons on June 19th the Labour M.P. for the Lancashire constituency of Westhoughton, Mr. J. T. Price, asked:

“Whilst the House will be quite pleased with the action taken by the right hon. gentlemen’s Ministry in dealing with this stabilisation of butter prices and checking the unlimited import of very cheap butter at subsidised rates, why is not the Ministry also prepared to take similar action on behalf of Lancashire cotton, which it has just turned down? ” 

Here we see the T.U.C. and Labour Party opposing Free Trade and supporting restrictions on imports. Yet at the Trades Union Congress in 1904 a strongly worded resolution was carried (by no means the first, or last) affirming that “any departure from the principles of Free Trade would be detrimental to the interests of the working classes.” The resolution named as the chief evil result of departing from Free Trade that Protection would increase “the cost of the people’s necessaries.”

About the same time the Labour Party was declaring its staunch adherence to Free Trade, and Mr. Francis Williams in his Fifty Years March recorded that at the 1906 General Election the Labour Party “saw eye to eye with the Liberals” on the dominant issue of the election, “the issue of Free Trade or Protection.” (Page 155.)

That trade union and Labour Party policy of support for Free Trade in order to get low prices for food and other articles derived from the agitation of the early nineteenth century. It was led and financed by the British cotton and other manufacturers and ended with the abolition of the Corn Laws and other protective laws, and turned Britain into a free trade country. The employers (who were interested in low prices, because that would enable them to pay low wages and make large profits) persuaded the workers that low prices would be in their interests. Apart from the agricultural workers who saw their jobs disappearing, most workers accepted the employers’ argument and thought that they had won a great victory, so for nearly a century the trade unions and later on the Labour Party were mostly free-traders, though this did not prevent workers in particular industries that were hit by foreign competition from taking a different view: just as today, while the T.U.C. and the Labour Party agree in demanding lower prices they do not think it very odd when the miners favour dearer coal; transport workers, higher fares; and agricultural workers, dearer food.

The same confusion exists among workers in other countries and shows itself at international gatherings. The textile workers in Hong Kong and India are not at all perturbed about the troubles of Lancashire, and the workers in Ireland and the Argentine are not impressed by arguments about the danger that if New Zealand farmers’ incomes fall, they will not be able to buy British motor cars and other manufactures.

The policies, always dealing only with the surface of things, change, but do not become sounder and wiser. The fact is that the trade unions and Labour parties are not international workers’ organisations trying to better the conditions of the working class everywhere, but sectional and national bodies viewing the world in the light of what they imagine to be their interests as workers in a particular trade in a particular country: they identify their interests with those of their employers.

And, of course, they are quite wrong. They do not constitute a united movement of hope progressing towards a new, better social order, but fractional bodies fighting against each other and with their policies determined for them by the rivalries of capitalist industries and capitalist national groups.

They can see that the capitalist world does not provide abundance, security and peace for the peoples of the world; that it cannot even secure that surpluses of food in U.S.A., Canada, Australia and other countries, shall be made’available to the half-starved millions of the world. They can see, too, that unsaleable surpluses are a positive evil in causing unemployment. Yet all they do is to try to solve these problems within the framework of capitalism. They have tinkered with useless remedies for upwards of a century and have got nowhere.

Recognition of and action on the simple principle that the workers in all countries have a common interest against the employing class, and the logical further recognition that it is in the interest of the workers to abolish capitalism and establish Socialism would revolutionise the home and international scene: but with all their experience of the uselessness of Free Trade and of Protection this is the one thing they are still unable to see. 

Edgar Hardcastle

Marx on Free Trade. (1926)

From the April 1926 issue of the Socialist Standard

(Continued from a previous issue)

But what of that? The class will still exist; nay, more, it will have increased.

But this is not all. The progress of industry creates less and less expensive means of subsistence. Thus spirits have taken the place of beer, cotton that of wool and linen, and potatoes that of bread.

Thus, as means are constantly being found for the maintenance of labour on cheaper and more wretched food, the minimum of wages is constantly sinking. If these wages began by letting the man work to live, they end by forcing him to live the life of a machine. His existence has no other value than that of a simple productive force, and the capitalist treats him accordingly. This law of the commodity labour, of the minimum of wages will be confirmed in proportion as the supposition of the economists, Free Trade, becomes an actual fact. Thus, of two things one: either we must reject all political economy based upon the assumption of Free Trade, or we must admit that under this same Free Trade the whole severity of the economic laws will fall upon the workers.

To sum up, what is Free Trade under the present conditions of society? Freedom of capital. When you have torn down the few national barriers which still restrict the free development of capital, you will merely have given it complete freedom of action. So long as you let the relation of wages-labour to capital exist, no matter how favourable the conditions under which you accomplish the exchange of commodities, there will always be a class which exploits and a class which is exploited. It is really difficult to understand the presumption of the Free Traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage-workers. On the contrary. The only result will be that the antagonism of these two classes will stand out more clearly.

Let us assume for a moment that there are no more Corn Laws or national and municipal import duties; that in a word all the accidental circumstances which to-day the working-man may look upon as a cause of his miserable condition have vanished, and we shall have removed so many curtains that hide from his eyes his real enemy.

He will see that capital released from all trammels will make him no less a slave than capital trammelled by import duties.

Gentlemen! Do not be deluded by the abstract word Liberty! Whose Liberty? Not the liberty of one individual in relation to another, but liberty of capital to crush the worker.

Why should you desire farther to sanction unlimited competition with this idea of freedom, when the idea of freedom itself is only the product of a social condition based upon Free Competition?

We have shown what sort of fraternity Free Trade begets between the different classes of one and the same nation. The fraternity which Free Trade would establish between the nations of the earth would not be more real, to call cosmopolitan exploitation universal brotherhood is an idea that could only be engendered in the brain of the bourgeoisie. Every one of the destructive phenomena to which unlimited competition gives rise within any one nation is reproduced in more gigantic proportions in the market of the world. We need not pause any longer upon Free Trade sophisms on this subject, which are worth just as much as the arguments of our prize essayists Messrs Hope, Morse, and Greg.

For instance, we are told that Free Trade would create an international division of labour, and thereby give to each country those branches of production most in harmony with its natural advantages.

You believe perhaps, gentlemen, that the production of coffee and sugar is the natural destiny of the West Indies.

Two centuries ago, nature, which does not trouble itself about commerce, had planted neither sugar-cane nor coffee trees there. And it may be that in less than half a century you will find there neither coffee nor sugar, for the East Indies, by means of cheaper production, have already successfully broken down this so-called natural destiny of the West Indies.

And the West Indies, with their natural wealth, are as heavy a burden for England as the weavers of Dacca, who also were destined from the beginning of time to weave by hand.

One other circumstance must not be forgotten, namely that, just as everything has become a monopoly, there are also nowadays some branches of industry which prevail over all others, and secure to the nations which especially foster them the command of the market of the world. Thus in the commerce of the world cotton alone has much greater commercial importance than all the other raw materials used in the manufacture of clothing. It is truly ridiculous for the Free Traders to refer to the few specialties in each branch of industry, throwing them into the balance against the product used in everyday consumption, and produced most cheaply in those countries in which manufacture is most highly developed.

If the Free Traders cannot understand how one nation can grow rich at the expense of another, we need not wonder, since these same gentlemen also refuse to understand how in the same country one class can enrich itself at the expense of another.

Do not imagine, gentlemen, that in criticising freedom of commerce we have the least intention of defending Protection.

One may be opposed to constitutionalism without being in favour of absolutism.

Moreover, the Protective system is nothing but a means of establishing manufacture upon a large scale in any given country, that is to say, of making it dependent upon the market of the world; and from the moment that dependence upon the market of the world is established, there is more or less dependence upon Free Trade too. Besides this, the Protective system helps to develop free competition within a nation. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute monarchy, as a means for the concentration of its own powers for the realization of Free Trade within the country.

But, generally speaking, the Free Trade system is destructive. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the system of commercial freedom hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favour of Free Trade.

(conclusion)

Cooking the Books: The Return of Tariff Reform (2022)

The Cooking the Books Column from the February 2022 issue of the Socialist Standard

In an article in The Times, headed ‘PM has a lever to ease cost of living crisis’, James Forsyth, the Spectator’s political editor, wrote that ‘tariff reform would be a good place to start’. He suggested the government ‘scrap tariffs on all imports bar certain sensitive agriculture goods’, claiming that ‘abolishing tariffs on what consumers buy would help shoppers.’

The currently rapid rise in the cost of living – the index of this went up by 5.4 percent in the 12 months to December – is a crisis, but not the same for workers as for employers. For workers, it represents a fall in their standard of living. The remedy for this is an increase in money wages. Given the current labour shortage, this becomes a crisis for employers. Even without trade union pressure, the play of supply and demand on the labour market will bring about an increase in money wages:

‘UK job vacancies surge to record high of 2.7 million as labour shortage worsens’ (Independent, 12 November).

‘UK labour shortages drive up wages’ (Financial Times, 16 November).

‘Moving jobs means big pay rise as firms fight for staff’ (Times, 12 January).

The FT reported:

‘More than half of FTSE 100 companies are now paying employees and contractors the voluntary “living wage” — which takes into account rising living costs — of £9.90 an hour outside London and £11.05 in the capital, compared with the current statutory minimum of £8.91, rising to £9.50’ .

So, the government has an economic as well as an obvious political reason to do something to ease the rise in the cost of living, and no doubt will.

What about ‘slashing import tariffs’? Would that work?

In the period between the end of the Napoleonic Wars in 1815 and the outbreak of WW1 in 1914, tariffs on food imports were a burning issue. After the defeat of Napoleon, the landlord class, which controlled political power, continued the war-time tariffs imposed on imported cereals as this kept the price and so rents up. However, a high price of bread meant higher money wages.

The factory owners resented this and launched a mass, and ultimately successful, campaign in the 1840s to repeal the ‘Corn Laws’. They knew that reducing the cost of bread would also reduce money wages, so making their exports more competitive. They managed to convince large sections of the working class for well over sixty years that tariffs on imports, a policy the Tories had begun to advocate under the name of ‘Tariff Reform’, would increase their cost of living and so reduce their standard of living.

But, as Engels explained in 1881 in an article on ‘The Wages Theory of the Anti-Corn Law League’:

‘The average price of a commodity is equal to its cost of production; the action of supply and demand consists in bringing it back to that standard around which it oscillates. If this be true of all commodities, it is true also of the commodity Labour (or more strictly speaking, Labour-force). Then the rate of wages is determined by the price of those commodities which enter into the habitual and necessary consumption of the labourer. In other words, all other things remaining unchanged, wages rise and fall with the price of the necessaries of life’ (Labour Standard, 9 July 1881).

If the cost of living (the cost of producing the commodity labour-power) goes up there would be an upward pressure on wages. Which is what is happening today. ‘Slashing import tariffs’ would reduce this pressure; and so benefit employers; not that, for various reasons, it is likely to be adopted. It wouldn’t make workers better off, at most just put a brake on their standard of living getting worse.

Cooking the Books: The Tories and Free Trade (2021)

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

Defending the proposed Free Trade deal (no tariffs, no quotas) with Australia in spite of the harm to British farmers, Boris Johnson told a meeting of Tory MPs ‘We are the party of Peel’ (Times, 21 May). Sir Robert Peel was prime minister in the government that brought about the repeal of the Corn Laws in 1846. These laws, by imposing tariffs on the import of wheat and other cereals, benefitted the landlord class since the high price of wheat encouraged the use of less fertile land, so increasing the rent on all wheat-producing land.

Peel was a Tory but his move split the Tory party and the Peelites eventually became part of the Liberal party. Most Tories followed Disraeli in opposing repeal on behalf of the landlord class. In the early 1900s the Tories were campaigning for Tariff Reform, i.e., the imposition of tariffs on imported manufactured goods.

Johnson’s historical ignorance is bad enough, but that of Liz Truss, the International Trade Secretary, is appalling. She invokes not just Peel but John Bright and Richard Cobden. On 3 June last year she tweeted ‘Today is the birthday of Richard Cobden, champion of free trade, manufacturing and founder of the Anti-Corn Law League’. Last October, she declared that she wanted the Board of Trade ‘to become the Cobden, Peel and Bright of the twenty-first century’. In an article in the Sunday Express (14 February) she quoted Cobden as hailing Free Trade as ‘the greatest revolution that ever happened in the world’s history’.

Bright and Cobden were the political leaders of the industrial capitalists in their struggle against the landlord class for political and economic supremacy. They were implacable opponents of everything the Tories stood for (imperialism, military preparations, aristocratic privilege). The repeal of the Corn Laws was a key event in British economic history but hardly the greatest revolution in world history. In any event most Tories opposed it.

Marx lived through these events and naturally commented on them. In January 1848 he gave a speech in Brussels on free trade in which he said:

  ‘The repeal of the Corn Laws in England is the greatest triumph of Free Trade in the 19th century. (…) Cheap food, high wages, this is the sole aim for which English Free-Traders have spent millions, and their enthusiasm has already spread to their brethren on the Continent. Generally speaking, those who wish for Free Trade desire it in order to alleviate the condition of the working class. But, strange to say, the people for whom cheap food is to be procured at all costs are very ungrateful. (…) The English workers have very well understood the significance of the struggle between the landlords and the industrial capitalists. They know very well that the price of bread was to be reduced in order to reduce wages, and that industrial profit would rise by as much as rent fell.’

He ended by stating that he was in favour of free trade but only because it would bring about a more rapid development of capitalism and the antagonism between the working class and the capitalist class and so hasten the social revolution. ‘It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade’.

Johnson and Truss are not justifying the Australia trade deal on the grounds of ‘Cheap Food, High Wages’. The deal is essentially only symbolic and any reduction in food prices that it might bring would be very slight. But we can expect this argument to be used to justify other trade deals, especially that with the US. But it will be as invalid as it was in the 1840s. Cheaper food will mean cheaper wages, leaving workers no better off.

Marx on Free Trade. (1924)

From the June 1924 issue of the Socialist Standard

(Continued from May “S.S.”)

Do not believe, gentlemen, that it is a matter of indifference to the working man whether he receives only four francs on account of corn being cheaper, when he had been receiving five francs before.

Have not his wages always fallen in comparison with profit ? And is it not clear that his social position has grown worse as compared with that of the capitalist ? Beside which he loses actually. So long as the price of corn was higher and wages were also higher, a small saving in the consumption of bread sufficed to procure him other enjoyments. But as soon as bread is cheap, and wages are therefore low, he can save almost nothing on bread for the purchase of other articles.

The English working men have shown the English Free Traders that they are not the dupes of their illusions or of their lies; and if, in spite of this, the workers have made common cause with the manufacturers against the landlords, it is for the purpose of destroying the last remnant of feudalism, that henceforth they may have only one enemy to deal with. The workers have not miscalculated, for the landlords, in order to revenge themselves upon the manufacturers, have made common cause with the workers to carry the Ten Hours Bill, which the latter had been vainly demanding for thirty years, and which was passed immediately after the repeal of the Corn Laws.

When Dr. Bowring, at the Congress of Economists, drew from his pocket a long list to show how many head of cattle, how much ham, bacon, poultry, etc., is imported into England, to be consumed — as he asserted — by the workers, he forgot to state that at the same time the workers of Manchester and other factory towns were thrown out of work by the beginning of the crisis.

As a matter of principal in political economy, the figures of a single year must never be taken as the basis for formulating general laws. We must always take the average of from six to seven years, a period during which modern industry passes through the successive phases of prosperity, overproduction, crisis, thus completing the inevitable cycle.

Doubtless, if the price of all commodities falls — and this is the necessary consequence of Free Trade — I can buy far more for a franc than before. And the working man’s franc is as good as any other man’s. Therefore Free Trade must be advantageous to the working man. There is only one little difficulty in this, namely that the workman, before he exchanges his franc for other commodities, has first exchanged his labour for the money of the capitalist. If in this exchange he always received the said franc while the price of all other commodities fell, he would always be the gainer by such a bargain. The difficulty does not lie in proving that the price of all commodities falling more commodities can be bought for the same sum of money.

Economists always take the price of labour at the moment of its exchange with other commodities, and altogether ignore the moment at which labour accomplishes its own exchange with capital. When it costs less to set in motion the machinery which produces commodities, then the things necessary for the maintenance of this machine, called workman, will also cost less. If all commodities are cheaper, labour, which is a commodity too, will also fall in price, and we shall see later that this commodity, labour, will fall far lower in proportion than all other commodities. If the working man still pins his faith to the arguments of the economists, he will find, one fine morning, that the franc has dwindled in his pocket, and that he has only five sous left.

Thereupon the economists will tell you :–

  “We admit that competition among the workers will certainly not be lessened under Free Trade, and will very soon bring wages into harmony with the low price of commodities. But, on the other hand, the low price of commodities will increase consumption, the larger consumption will increase production, which will in turn necessitate a larger demand for labour, and this larger demand will be followed by a rise in wages.

  

   “The whole line of argument amounts to this : Free Trade increases productive forces. When manufactures keep advancing, when wealth, when the productive forces, when, in a word, productive capital increases, the demand for labour, the price of labour, and consequently the rate of wages, rises also.”

The most favourable condition for the working man is the growth of capital. This must be admitted : when capital remains stationary, commerce and manufacture are not merely stationary but decline, and in this case the workman is the first victim. He goes to the wall before the capitalist. And in the case of the growth of capital, under the circumstances, which, as we have said, are the best for the working man, what will be his lot? He will go to the wall just the same. The growth of capital implies the accumulation and the concentration of capital. This centralization involves a greater division of labour and a greater use of machinery. The greater division of labour destroys the especial skill of the labourer; and by putting in the place of this skilled work labour which any one can perform, it increases competition among the workers.

This competition becomes more fierce as the division of labour enables a single man to do the work of three. Machinery accomplishes the same result on a much larger scale. The accumulation of productive capital forces the industrial capitalist to work with constantly increasing means of production, ruins the small manufacturer, and drives him into the proletariat. Then, the rate of interest falling in proportion as capital accumulates, the people of small means and retired tradespeople, who can no longer live upon their small incomes, are forced to look out for some business again and ultimately to swell the number of proletarians. Finally, the more productive capital grows, the more it is compelled to produce for a market whose requirements it does not know—the more supply tries to force demand, and consequently crises increase in frequency and in intensity. But every crisis in turn hastens the concentration of capital, adds to the proletariat. Thus, as productive capital grows, competition among the workers grows too, and grows in a far greater proportion. The reward of labour is less for all, and the burden of labour is increased for at least some of them.

To be continued

Marx on Free Trade. (1924)

From the May 1924 issue of the Socialist Standard

A speech delivered before the Democratic Association of Brussels, at its public meeting, January 9th, 1848.

Reprinted from “The Poverty of Philosophy.” (Twentieth Century Press, Ltd., London, 1900).

Gentlemen: – The Repeal of the Corn Laws in England is the greatest triumph of Free Trade in the nineteenth century. In every country where manufacturers discuss Free Trade, they have in mind chiefly Free Trade in corn or raw material generally. To burden foreign corn with protective duties is infamous, it is to speculate on the hunger of the people.

Cheap food, high wages, for this alone the English Free Traders have spent millions, and their enthusiasm has already infected their continental brethren. And, generally speaking, all those who advocate Free Trade do so in the interests of the working class.

But, strange to say, the people for whom cheap food is to be procured at all costs are very ungrateful. Cheap food is as ill reputed in England as is cheap government in France. The people see in these self-sacrificing gentlemen, in Bowring, Bright & Co., their worst enemies and the most shameless hypocrites.

Everyone knows that in England the struggle between Liberals and Democrats takes the name of the struggle between Free Traders and Chartists. Let us see how the English Free Traders have proved to the people the good intentions that animate them.

This is what they said to the factory hands : –

  “The duty on corn is a tax upon wages ; this tax you pay to the landlords, those medieval aristocrats ; if your position is a wretched one, it is only on account of the high price of the most indispensable articles of food.”

The workers in turn asked of the manufacturers : –

  “How is it that in the course of the last thirty years, while our commerce and manufacture has immensely increased, our wages have fallen far more rapidly, in proportion, than the price of corn has gone up ?

  “The tax which you say we pay the landlords is about three pence a week per worker. And yet the wages of the hand-loom weaver fell, between 1815 and 1843, from 28s. per week to 5s., and the wages of the power-loom weavers, between 1823 and 1843, from 20s. per week to 8s. And during the whole of the time that portion of the tax which you say we pay the landlord has never exceeded three pence. And, then, in the year 1834, when bread was very cheap and business lively, what did you tell us ? You said, ‘If you are poor, it is only because you have too many children, and your marriages are more productive than your labor !’

  “These are the very words you spoke to us, and you set about making new Poor Laws, and building work houses, those Bastilles of the proletariat.”

To this the manufacturers replied : –

   “You are right, worthy labourers ; it is not the price of corn alone, but competition of the hands among themselves as well, which determines wages.

   “But just bear in mind the circumstance that our soil consists of rocks and sandbanks only. You surely do not imagine that corn can be grown in flowerpots ! If, instead of wasting our labour and capital upon a thoroughly sterile soil, we were to give up agriculture, and devote ourselves exclusively to commerce and manufacture, all Europe would abandon its factories, and England would form one huge factory town, with the whole of the rest of Europe for its agricultural districts.”

While thus haranguing his own working men, the manufacturer is interrogated by the small tradesınen, who exclaim : –

  “If we repeal the Corn Laws, we shall indeed ruin agriculture ; but, for all that, we shall not compel other nations to give up their own factories, and buy our goods. What will the consequences be ? I lose my customers in the country, and the home market is destroyed.”

The manufacturer turns his back upon the working men and replies to the shopkeeper : –

   “As to that, you leave it to us ! Once rid of the duty on corn, we shall import cheaper corn from abroad. Then we shall reduce wages at the very time when they are rising in the countries where we get our corn. Thus in addition to the advantages which we already enjoy we shall have lower wages and, with all these advantages, we shall easily force the Continent to buy of us.”

But now the farmers and agricultural labourers join in the discussion.

  “And what, pray, is to become of us ? Are we to help in passing a sentence of death upon agriculture, when we get our living by it ? Are we to let the soil be torn from beneath our feet?”

For all answer the Anti-Corn Law League contented itself with offering prizes for the three best essays upon the wholesome influence of the repeal of the Corn Laws on English agriculture.

These prizes were carried off by Messrs. Hope, Morse and Greg, whose essays were distributed broadcast throughout the agricultural districts. One of the prize essayists devotes himself to proving that neither the tenant farmer nor the agricultural labourer would lose by the repeal of the Corn Laws, and that the landlord alone would lose.

  “The English tenant farmer,” he exclaims, “need not fear repeal, because no other country can produce such good corn so cheaply as England. Thus, even if the price of corn fell, it would not hurt you, because this fall would only affect rent, which would go down, while the profit of capital and the wages of labour would remain stationary.”

The second prize essayist, Mr. Morse, maintains, on the contrary, that the price of corn will rise in consequence of repeal. He is at infinite pains to prove that protective duties have never been able to secure a remunerative price for corn.

In support of his assertion he quotes the fact that, wherever foreign corn has been imported, the price of corn in England has gone up considerably, and that when no corn has been imported the price has fallen extremely. This prize-winner forgets that the importation was not the cause of the high price, but that the high price was the cause of the importation. In direct contradiction of his colleague he asserts that every rise in the price of corn is profitable to both the tenant farmer and labourer, but does not benefit the landlord.

The third prize essayist, Mr. Greg, who is a large manufacturer and whose work is addressed to the large tenant farmers, could not afford to echo such silly stuff. His language is more scientific. He admits that the Corn Laws can increase rent only by increasing the price of corn, and that they can raise the price of corn only by inducing the investment of capital upon land of inferior quality, and this is explained quite simply.

In proportion as population increases, it inevitably follows, if foreign corn cannot be imported, that less fruitful soil must be placed under cultivation. This involves more expense and the product of this soil is consequently dearer. There being a demand for all the corn thus produced, it will all be sold. The price for all of it will of necessity be determined by the price of the product of the inferior soil. The difference between this price and the cost of production upon soil of better quality constitutes the rent paid for the use of the better soil.

If, therefore, in consequence of the repeal of the Corn Laws, the price of corn falls, and if, as a matter of course, rent falls along with it, it is because inferior soil will no longer be cultivated. Thus the reduction of rent must inevitably ruin a part of the tenant farmers.

These remarks were necessary in order to make Mr. Greg’s language comprehensible.

  “The small farmers,” he says, “who cannot support themselves by agriculture must take refuge in manufacture. As to the large tenant farmers, they cannot fail to profit by the arrangement : either the landlord will be obliged to sell them land very cheap, or leases will be made out for very long periods. This will enable tenant farmers to invest more capital in their farms, to use agricultural machinery on a larger scale, and to save manual labour, which will, moreover, be cheaper, on account of the general fall in wages, the immediate consequence of the repeal of the Corn Laws.”

Dr. Bowring conferred upon all these arguments the consecration of religion, by exclaiming at a public meeting, “Jesus Christ is Free Trade, and Free Trade is Jesus Christ.”

It may be easily understood that all this cant was not calculated to make cheap bread attractive to working men.

Besides, how should the working men understand the sudden philanthropy of the manufacturers, the very men still busy fighting against the Ten Hours Bill, which was to reduce the working day of the mill hands from twelve hours to ten ?

To give you an idea of the philanthropy of these manufacturers I would remind you of the factory regulations in force in all their mills.

Every manufacturer has for his own private use a regular penal code by means of which fines are inflicted for every voluntary or involuntary offence. For instance, the hand pays so much when he has the misfortune to sit down on a chair, or whisper, or speak, or laugh ; if he is a few moments late ; if any part of a machine breaks, or he turns out work of an inferior quality, &c. The fines are always greater than the damage really done by the workman. And to give the workman every opportunity for incurring fines the factory clock is set forward, and he is given bad material to make into good stuff. An overseer unskilful in multiplying infractions of rules is soon discharged.

You see, gentlemen, this private legislation is enacted for the especial purpose of creating such infractions, and infractions are manufactured for the purpose of making money. Thus the manufacturer uses every means of reducing the nominal wage, and even profiting by accidents over which the workers have no control.

And these manufacturers are the same philanthropists who have tried to persuade the workers that they were capable of going to immense expense for the sole and express purpose of improving the condition of these same working men ! On the one hand they nibble at the workers’ wages in the pettiest way, by means of factory regulations, and, on the other, they are prepared to make the greatest sacrifices to raise those wages by means of the Anti-Corn Law League.

They build great palaces, at immense expense, in which the League takes up its official residence. They send an army of missionaries to all corners of England to preach the gospel of Free Trade ; they print and distribute gratis thousands of pamphlets to enlighten the working man upon his own interests. They spend enormous sums to buy over the press to their side. They organise a vast administrative system for the conduct of the Free Trade movement, and bestow all the wealth of their eloquence upon public meetings. It was at one of these meetings that a working man cried out : –

  “If the landlords were to sell our bones, you manufacturers would be the first to buy them, and to put them through the mill and make flour of them.”

The English working men have appreciated to the fullest extent the significance of the struggle between the lords of the land and of capital. They know very well that the price of bread was to be reduced in order to reduce wages, and that the profit of capital would rise by as much as rent fell.

Ricardo, the apostle of the English Free Traders, the leading economist of our century, entirely agrees with the workers upon this point. 

In his celebrated work upon political economy he says : –

  “If instead of growing our own corn… we discover a new market from which we can supply ourselves… at a cheaper price, wages will fall and profits rise. The fall in the price of agricultural produce reduces the wages, not only of the labourer employed in cultivating the soil, but also of all those employed in commerce or manufacture.”

(To be continued)

The Land and the Labourer (1939)

From the February 1939 issue of the Socialist Standard

The discontent of the small-capitalist agriculturalists, known as farmers, with the present Government, is finding expression upon the political field. One Independent Conservative candidate threatened to fight a National Liberal nominee in East Norfolk, and only withdrew at the last moment, and similar action is being threatened in other constituencies. At least one influential daily paper, the Daily Express, openly favours them.

In passing, it is interesting to notice how any special section of the property-owning class which desires an alteration in Government policy is prepared to exploit the war-scare. Do the railway companies wish to be rid of century-old restrictions? They profess deep concern for their ability to act efficiently in war-time. Are the farmers out to re-establish century-old restrictions upon foreign imports ? Their appeal is based upon the need for national independence as regards a food supply.

The Government’s policy is an attempt to maintain internal agricultural prices by restricting production by means of a marketing board. The farmers’ grouse is that this policy, so far from helping them, has merely subsidised the distributive concerns. The middleman, as usual, comes in for vituperation. He is, however, fairly safe in the knowledge that both economic conditions and the principles of his class ensure that given quantities of capital receive a proportionate rate of profit. The large scale upon which commerce in agricultural, as in other, products is carried on to-day requires a correspondingly large capital, which accounts to a large degree for the disparity between wholesale and retail prices, of which we hear so much.

Another factor which distresses many farmers is the fact that they were practically compelled by their one-time landlords to buy their farms when prices of land were high as a result of the war-boom. The purchases were made largely on a mortgage basis, with the result that the, farmer found himself out of the frying-pan into the fire. Interest payments took the place of rent. The landlord was replaced by the banker.

Where does the agricultural labourer come in? Each candidate in the East Norfolk election professed concern for him. At that moment, of course, he had a vote, which they wanted; but what do Protection or regulated marketing mean to him ?

He can hardly have any strong, motive for wishing to return to the condition of his ancestors of a hundred years ago, before the repeal of the corn-laws; while his attitude to his calling to-day may be gauged from the fact that no less than 180,000 of his ilk lost their employment during the sixteen years prior to 1937, a rate of decline which still goes on.

Wages boards have failed to prevent this, but there appears to be no lack of people anxious to supply him with yet more boards. For instance, the Labour Party. Their policy is outlined by Lord Addison in a penny pamphlet published eighteen months ago (“Labour's Policy for our Countryside").

As is only to be expected, it advocates “National ownership of land"; but lest some workers should imagine that this will rid them of the burden of landlords and capitalist farmers, let a quotation from page 8 serve: —

  “Fair payment would be made to the present owners. Land would be paid for by the issue of National Securities to the amount of the purchase price justly determined, and the State, which would be guarantor for these National Securities, would acquire the freehold and all other rights in exchange.
   “The Labour Party is opposed to confiscation, and the prejudice which its opponents seek to foster by false accusations on this subject should be disregarded. Many thoughtful men of all parties have long been convinced that National Ownership is the only way by which good cultivators can be freed from the crushing burdens of rent, mortgage interest and other charges. . . .
   “Under Labour Government a farmer who does his work well need have no fear of disturbance.”

What is a farmer’s work? Briefly, it is to fleece his labourers as they do his sheep for him. They plough the fields and scatter the good seed on the land, but it is not to them that the noble Lord refers in his phrase “good cultivators.” The farmer takes the fruits of their labours and sells them for the best price he can get, but the Labour Party do not regard this process as confiscation. Out of his gross profits the farmer meets his “crushing burden” of rent and interest, but any attempt to restore the wealth taken from the workers is opposed by the Labour Party. In their eyes, as in the eyes of Liberals and Tories, such a restoration would be confiscation. Thus do they take the "Soc” out of Socialism.

Instead of Farmer Giles paying his rent to Lord Tomnoddy, he will hand it in to a Government department, which will spend it on an improved Air Force to scare the crows away. His Lordship will, no doubt, spend the interest on his National Security in Switzerland or Monte Carlo, what time labourer Hodge consoles himself with a National Wages Board (see page 12), which is to prescribe a National Minimum Wage.

Thus the essential features of capitalism in agriculture would remain. Such farmers as failed to pay the Minimum Wage, and were discovered, would be prosecuted, no doubt, from time to time, but there is no hint in the Labour Party programme of any danger of them losing their farms over it; and the steady increase in agricultural unemployment going on, Hodge is unlikely to be excessively fussy.

The farmers are promised easier credit, lower rents, guaranteed prices and control of imports; but, apart from the fact that the Labour Party, like their Liberal and Tory rivals, find it easier to make promises than to keep them, none of these proposals show any promise of helping the agricultural workers. It is not because the farmers are poor that the labourers suffer. Volumes have been written, from Professor Thorold Rogers downwards, to show that the height of the farmers prosperity through the centuries was founded upon the deepest degradation.of the workers. 

After the Napoleonic Wars, during which the farmers (along with the landlords, bankers, merchants and manufacturers, stockbrokers and army contractors) had made fortunes, the agricultural workers were semi-paupers, having their wages made up by parish relief.

In 1830, with Protection still in force, their misery was revealed “by the light of blazing corn- stacks,” to quote the expression of one writer of the time (S. Laing, in “National Distress”).

In 1863, in spite of an enormous improvement in agricultural methods and equipment, fed by State subsidies during the previous twenty years, the land-workers were worse fed than convicts, and had to do twice as much work (“Royal Commission’s Report on Penal Servitude”).

Thus experience shows that good conditions for the farmers hold no guarantee for the comfort and security of those who produce their wealth. Their lot, whether under Free Trade or Protection, has been little, if anything, better than starvation. As for the rest of the workers, they are offered food at “fair prices,” as a bait for supporting the Labour Party's scheme.

Here again, experience of a comparatively recent date shows the hollowness of the promise. After the War the general cost of living fell. Did the workers gain? No, wages fell with prices.

Whatever effect upon prices the schemes of the Labour Party may have, the workers cannot afford to place their hopes in them. Their task, so far as their wages are concerned, will still be to use their trade unions as weapons of defence; but a still greater task awaits them, i.e., to free themselves from wage-slavery by making the land and factories, etc., the common property of the whole people.

Eric Boden

Cooking the Books: WTO rules, ok? (2019)

The Cooking the Books column from the April 2019 issue of the Socialist Standard

The World Trade Organisation, of which nearly all states are members, regulates trade between them. Its basic rule is the ‘Most Favoured Nation’ clause which lays down that, if a state grants favourable terms to another state, say, by reducing tariffs on imports from it, it has to apply the same terms to all other WTO member-states. This applies to customs unions as well as states.

Tariffs are a tax on imports which increase the price of the imported product. This ‘protects’ the home industry producing the same product from competition from cheaper imports. The EU, as a customs union, has to follow WTO rules when it imposes tariffs, as it does to protect agriculture, the car industry and much more. If Britain leaves the EU trading bloc it would have to ‘trade on WTO terms’ but this is merely stating the obvious; it says nothing about what the trade and tariff policy conforming to these terms is going to be.

Some Brexiteers think Britain should abolish all tariffs. ‘Liam Fox, the international trade secretary, wants a move to zero tariffs in as many areas as possible’, while for Jacob Rees-Mogg ‘cutting import tariffs would lead to cheaper food, clothes and shoes’ (Times, 18 February). Tim Martin, owner of the Wetherspoon pub chain, wants to ‘abolish all the taxes (tariffs) on non-EU imports, like oranges, rice, coffee, Aussie wines and a total 12,651 products. This will reduce prices in the shops, making for a better-off public’ (Wetherspoon News, Winter 2018/19).

But would workers be better off if the prices of everyday products fell? This is a claim made by free-traders since the time of Richard Cobden who campaigned successfully to get the Corn Laws repealed in 1846. These had been introduced after the Napoleonic Wars to maintain the high war-time prices of wheat, barley and rye and so protect the rents of landlords whose tenants grew these. Industrial capitalists resented this as the artificially high food prices meant they had to pay more as wages.

Cobden’s Anti-Corn Law League sought working class support by claiming that cheaper bread would make them better off. Engels, who had been working in his father’s factory in Manchester at the time of the repeal campaign, recalled that its aim had been ‘to reduce the price of bread and thereby the money rate of wages’ which ‘would enable British manufacturers to defy all and every competition with which wicked or ignorant foreigners threatened them’ (Labour Standard, 18 June 1881).  Challenged by a Cobdenite, he explained why the League’s theory that ‘dear bread meant low wages and cheap bread high wages’ was wrong:

  The average price of a commodity is equal to its cost of production; the action of supply and demand consists in bringing it back to that standard around which it oscillates. If this be true of all commodities, it is true also of the commodity Labour (or more strictly speaking, Labour-force). Then the rate of wages is determined by the price of those commodities which enter into the habitual and necessary consumption of the labourer. In other words, all other things remaining unchanged, wages rise and fall with the price of the necessaries of life.

So, insofar as abolishing or reducing tariffs on items of popular consumption reduced the cost of living this would exert a downward pressure on wages. Fox, Rees-Mogg, Tim Martin and other modern-day Cobdenites are wrong when they claim that the end result of cheaper food, clothes, shoes, oranges, rice, coffee and Aussie wine would be that we would have more to spend.

Economics and reforms (1977)

From the August 1977 issue of the Socialist Standard

The case of the SPGB against reforms is based on the fact that reforms of all kinds involve the working class in political action which is detrimental to the cause of Socialism. Since the middle of the 19th century many reform measures have been introduced, some of which have benefitted both capitalism and the worker. If reforms make capitalism more tolerable for the worker, they make it more secure for the capitalist.

In addition to supporting new reform measures put forward by non-Socialist parties, the working class find themselves involved in other types of political activity such as campaigns against unemployment (the “Right to Work” campaign) and for price restraint; or attempts to prevent the erosion of reforms previously granted, and the extension and up-dating of existing reforms. At present there are protests against the cut-back in the National Health Service, delays in building new hospitals, and proposals to allow doctors to charge consultancy fees and for charges to be made for hospital in-patients; and against the restriction on spending on education, closing teachers’ training colleges, withdrawal of free school milk, and in substantial increases in university fees coupled with reductions in grants in real terms. A further example is opposition to the proposal to remove subsidy from council housing, and cut-backs in housing repairs.

Capitalism is never at rest; the gains of yesterday can be dissipated by the events of the present. There are no safe reform anchorages or havens which afford permanent shelter. The battle demands to be fought over and over again, as events in the past have demonstrated.

In the 19th century, at an early stage in the development of capitalism, the ruling class was dominated by the landed aristocracy, who held political power. Owning the land, they were the main food producers. To protect their monopoly and keep up prices they forbade the import of foreign corn. As a result workers had to pay high prices for bread. Consequently, those workers who were employed in industry were compelled to press for higher wages, which the industrialist had to pay if he wanted to keep an effective labour force, but the increase went into the pockets of the landlord and the landed aristocracy.

The immediate reaction of the industrialists was to form the Anti-Corn Law League in 1839 in Manchester. This was a very wealthy organization under the control of Cobden and Bright, the Liberal Party leaders. In the four years up to 1843, the League distributed over 10 million copies of pamphlets and newspapers calling on the workers to protest against the high price of corn, which they claimed was responsible for working-class poverty. Every working-class organization at the time was saturated with the propaganda of the Anti-Corn Law League. The workers duly responded, and after much agitation Peel repealed the Corn Laws in 1846. Foreign corn was allowed in, the landlords’ monopoly was broken and the price of bread fell. But wages also fell, and the worker was no better off. The industrialist had won his battle against the landlord.

130 years later nothing has changed. The working class are still called upon to support campaigns to keep prices stable—a fruitless exercise, but one which nevertheless takes up its time and energy. The Social Contract, which the Labour Party and the trade unions entered into to keep wages stable and prices down, has been a complete failure, and the very people who were its chief advocates like Hugh Scanlon, Jack Jones and other TU leaders are row turning their backs on it. According to the official figures, living standards are back to what they were four years ago (The Times, 9th July 77). The worker has to fight harder to stand still. The same process operates with regard to statutory reform. The government departments concerned, broadly speaking, have to operate with a budget set by Parliament. As prices rise through inflation it does not follow that adjustments are made, or that an increased allocation of money is made available.

Most workers believe that the choice of introducing social reforms or dealing with major social problems is a matter for the government of the day. This is not the case. Governments of all varieties represent the interests of the ruling class. Reforms have to be paid for out of taxation, and the burden of taxation rests on the employers. Taxes mainly are paid out of income, and the income of the capitalist employer or shareholder is derived from the surplus-value created by the worker. The rate of taxation can never exceed the level of profit, any more than the part can be bigger than the whole.

Social reforms are not within the gift of the government, even a Labour government which is ostensibly committed to giving the workers a better deal. There is a certain amount of room for manoeuvre, but it is capitalism which has developed the powers of government, not the politicians. If its basic function is to secure the capitalist in his privileged position, it cannot contradict the basis of its own existence. It cannot ignore the economics of capitalism and the capitalist’s right to profit. Experience has shown that to the extent that the capitalist introduces reforms which “benefit” workers, so are these taken into account when wages are negotiated. Subsidized rents, subsidized food, free medical treatment, children’s allowances, and any other “benefits” are taken into account by both trade unions and employers when dealing with wage claims.

The final position is stated in the basic Marxian economic law that the worker, generally speaking, only receives sufficient wages to sustain him and his family at any given time in his particular job, from week to week or from month to month.

The idea that prevails amongst the “militant left” that agitation for reforms will provide the worker with sufficient experience to demand Socialism has not stood up to an historical examination. It simply has not worked, despite the ceaseless reformist and trade-union action carried on over the past 150 years or so. The capitalists are in control over the working class so long as reformist ideas form the mainstream of political thinking. The only way to counter the propaganda of the reformer is to show that it hasn’t even achieved the limited objectives of making capitalism tolerable, let alone advance Socialism. The difference between Socialist society and capitalism is that social requirements would be dealt with and carried out as soon as the community became aware of the facts of the problem, and as a matter of course. There can be no question of reformers begging social reforms from useless parasites for and on behalf of the deprived useful members of the working class. We do not want their charity now, and we will not need it later.

Jim D'Arcy

Finance and Industry: The Common Market and the old Corn Laws (1962)

The Finance and Industry column from the October 1962 issue of the Socialist Standard

The Economist in a recent article on the difficulty Macmillan will face in trying to get Parliamentary approval for entry into the Common Market, described it as potentially “the most explosive internal situation since the repeal of the Corn Laws in 1846.” The writer was warning of the possibility that the Tory Party might split and the Government suffer defeat by an alliance between “Tory reactionaries seeking disentanglement from Europe," and the Labour Party seeking to win an election on anti-Common Market votes.

It is an interesting parallel. The repeal of the Corn Laws (duties on imported corn), and the removal of the import duties on a wide range of other goods and the earlier abolition of duties on exports, marked the great changeover of British trading policy from high protection to free trade. Among other consequences it was expected to bring speedy ruin to farmers and landlords as floods of cheap imported food started coming in. These agricultural interests were influential in the Conservative Party which was then in power with Sir Robert Peel as Prime Minister. He however favoured Repeal, both on general grounds and because of the disastrous potato famine that occurred in Ireland in 1845, but his fellow ministers in the Cabinet would not agree. He thereupon resigned, but the Liberal leader. Sir John Russell, was unable to get enough support in Parliament for a Liberal government and Peel was soon back in office. He then forced the Repeal of the Corn Laws through the House of Commons against the will of his own Party. He was able to do this because the Liberal opposition M.P.'s who voted for it were joined by over a hundred Conservative “free-traders," many of whom later joined the Liberal Party. Peel had got his way, but it cost him his Premiership, and the Government for the next six years was Liberal.

The British industrial and commercial capitalists had truly come into their own. British manufacturers and British-owned ships dominated the markets and shipping lanes of the world. The Free-trader, Dr. Bowring, might declare “Jesus Christ is Free Trade and Free Trade is Jesus Christ." But what the manufacturers were aiming at was low-priced raw material and food imports so that wages could be reduced, selling prices of manufacturers kept down and profits raised. They hid their real aim under promises of benefits for everybody — for the worker, cheap food and high wages; and for the whole human race, the dawn of an era of brotherhood and peace. They were, however, not able to convince the farmers and landowners that it would be good for them also, but as things turned out the repeal of the import duties on food did not have the feared disastrous effects at once. For one thing the duties on imported corn were not abolished at one stroke, but by stages over a period of years. Secondly, it took time to organise the import of food from abroad and it was not till many years later that the floods of cheap food started coming in from across the Atlantic. Also the big discoveries of easily-mined gold in California and Australia had the effect of raising the general price level,

The enthusiasts for Free Trade convinced themselves that it was a doctrine for universal application and were surprised to find that it was not everywhere accepted. Free Trade suited the triumphant British exporters of manufactured goods, but not their less successful rivals on the Continent.

  On the Continent—the backbone of the Protectionist Party was formed by the manufacturers who feared the English imports; the Free-Trade Party were the agriculturalists who wanted cheap manufactures. Thus in Germany the Agrarians or Junkers were Free-Trade, so were the great landowners of Russia, the wine-producers of France and the cotton growers of the South in the United States. They were all exporters and wanted markets abroad and were willing to take manufactures in return.
(Knowles, Industrial and Commercial Revolutions in Great Britain during the 19th Century. P.I32).

Later on when British capitalists ceased to determine the world market for manufactured goods and had to face thrusting competitors from overseas, many of them abandoned Free Trade.

In 1923 the Baldwin Tory Government and its big business backers had decided to go over to Protection. They fought an election on the issue, but were defeated and it was not until nine years later under the Import Duties Act, 1932. that a general ten per cent. import duty was imposed on all imported goods except raw materials and foodstuffs.

Baldwin's failure to carry the electors with him in 1923 (his policy was opposed by both Liberals and Labour) is a reminder of the different political situation in 1846. At that time the workers had no votes and the electorate was well under a million in a population of 18 million; now it is about 36 million in a population of 52 million.

One other difference is that nowadays hardly anyone can be found in this country crusading for Free Trade in the way the old Corn Law abolitionists did. The supporters of the European Common Market (including the formerly Free Trade Liberals) want Free Trade inside the Market, but a quite high tariff wall against imports from outside; and their opponents who want to keep out of the Market and develop Commonwealth trade are likewise supporters of Protective Tariffs.

Where some big backing for Free Trade can be found now is in the United States, and the reason is the same as that which operated in Britain in 1846. The Kennedy Administration has been trying to move towards freer trade; naturally against the opposition of those groups that favour high tariff protection for their own products. A correspondent writing in the Financial Times (11/9/62) says:

  In fighting for freer trade the President has enjoyed the support of the most progressive section of American industry—capital goods—which have been chiefly responsible for expanding the U.S. export surplus in recent years. While the U.S. is now a net importer of finished consumer goods, exports of capital equipment- construction machinery, rolling machinery, and the like—are some 6,000 million dollars larger than imports.

One factor does not change. All of the industrial and commercial groups whose financial interest leans this way or that over free trade, protection, common market and the like will go on proclaiming that all they are concerned with is the well-being of the workers—just as it was in 1846.

Edgar Hardcastle