Editorial: The Bankruptcy of “Communist” Theory. (1924)

Editorial from the December 1924 issue of the Socialist Standard

Immediately after the Bolshevik seizure of power there was some excuse for the misconceptions of the significance and causes of that event, which were prevalent here in working-class circles. Reliable information on Russian affairs had been lacking throughout the war years, and to those who were not familiar through historical study with the slow growth of social forces, no rumoured happening behind the wall of censorship was too fantastic to be believed. Those people outside Russia who erred in crediting the Bolsheviks with achievements which were hardly dreamed of by Lenin and other responsible Communists, were quite unable to examine critically the proposals which were put out by the Third International for the conduct of the workers’ struggle elsewhere. They erred again and more seriously in assuming that methods which may have been useful and probably inevitable in Czarist Russia could be applied here where almost every condition is different. Underlying Communist doctrines lay the assumption that constitutional action is futile for the Socialist’s main aim, that the democratic idea is a myth and a danger, and that capitalism can be overthrown not by the deliberate act of an organised working class, but only by a minority, the Communist Party. To the superficial observer the condition of Europe at the end of the war and at the beginning of the peace made these assumptions less absurd than they appear now. There were sections of the ruling class which had lost their grip on the situation in face of a war which they began and could not control, and in face of peace problems which threatened to be insoluble and fatal. The moment passed and even during capitalism’s difficulty, the workers, in spite of equally superficial views to the contrary, were never less ready to act as a class against their exploiters. All that can be said for the Communists is that many of them did believe their desperate creed. They were prepared to pit their puny strength against the might of the capitalist state, to have their own and other people’s heads broken in trying conclusions with the armed forces, to go to jail for defiance of capitalist laws and in general to face the consequences of their own foolhardy actions. Not so our present-day Communists. The violent doctrines of 1920 will no longer stir even the most emotional and youthful would-be rebel. They are too obviously impracticable to stand the test of discussion in the light of the present situation. But while they dare not go on preaching civil war they are not prepared to admit their error. Instead, they now ask us to believe that they are the innocent victims of wicked misrepresentation, and that they never believed these doctrines at all. Accordingly we give below a selection from the host of declarations they now want be forgotten, prefaced by their recent repudiation of their original policies.

  “The Communist Party has repeatedly pointed out that unless it is able to win over to its standard a decisive majority of the working class it cannot realise the social transformation. The Communist Party believes that without the activity of a majority of the workers both in the struggle to set up a real Workers’ Government, and in the subsequent Socialist reconstruction, emancipation is impossible.” (Editor, Workers’ Weekly, November 7th, 1924.)

Lenin writing on Bourgeois Parliamentarism versus Proletarian Revolution (Workers’ Dreadnought, August 28th, 1920) used the following words :—

  “The accusations of siding with the Bourgeoisie can indeed be levelled at all … who, while proclaiming adhesion to the dictatorship of the proletariat in words, in deeds propagate the belief in the necessity of gaining under the capitalist régime the formal consent of the majority of the population (that is a majority of the votes in a bourgeois parliament) before political power can be transferred to the proletariat . . . Let the revolutionary proletariat first overthrow the bourgeoisie, throw off the yoke of capitalism . . . and then it will be in a position to gain the support of the non-proletarian working masses.”

Lenin here uses “proletarian” to mean only the class-conscious minority, not the whole of the working class, as is shown by his following remark that “economically and politically it (the proletariat) represents the true interest of the vast majority of the workers.”

Eden and Cedar Paul, two members of the C.P.G.B., in their pamphlet “Communism” (Labour Publishing Co., 1920, p 12), wrote— “the Bolsheviks believed in the concentration of revolutionary energy in the hands of a comparatively small group prepared to seize power and declare the dictarorship of the proletariat. . . The dictatorship will not be exercised here, any more than it has been exercised in Russia, by the masses. It will be exercised by an oligarchy by a revolutionary élite.”

Lenin, speaking at a Peasants’ Congress (“Ten Days that Shook the World,” p. 303), is reported by John Reed as saying : “If Socialism can only be realised when the intellectual development of all the people permits it, then we shall not see Socialism for at least 500 years.”

Karl Radek (“The Development of Socialism from Science to Practice”) describes “the notion that the proletariat should undertake no revolution until it is satisfied it has the majority of the people at its back,” as “nonsense.”

Bela Kun (“Liberator,” March, 1920), declared in an interview that “only a small part of the Hungarian workers were Bolshevik . . . But the most effective means of revolutionising the masses is revolution.”

Clara Zetkin, speaking for the Third Interrnational at the Berlin meeting of the three Internationals in April, 1922, declared that “The new political organism cannot at first be broad-based upon the people’s will . . . The revolutionary élite wrests the powers of the State from the grip of the capitalist class, and establishes the dictatorship of the proletariat.” (Official Report, p. 15, Labour Publishing Co. Ltd)

The Thesis of the Third International on “Parliamentarism, etc.,” adopted at the Moscow Congress, 1920 (C.P.G.B., p. 4), “repudiates the possibility of winning over parliament.” “The Statutes and Conditions of Affiliation” (C.P.G.B., page 4) declares that “the aim of the Communist International is to organise an armed struggle for the overthrow of the international bourgeoisie …”

The “Workers’ Republic” (Communist Party of Ireland, April 7th, 1923) states that “the advanced workers, organised in a Communist Party . . . will put the capitalist class out of existence by handing back to the workers that which has been filched from them.”

So much for the Communists’ repudiation of minority action and the armed revolt against the capitalist class. They have changed their watchwords because the old ones were growing ever more unpopular and absurd, but they have failed to see where they have drifted.

In 1920 they were sharply differentiated from other so-called working class parties, but this distinguishing feature removed, they fall back where they truly belong, into the ranks of the reformists. With their long and continually changing list of “Immediate demands,” ranging from capitalist measures like nationalisation to the dissolution of the British Empire, both of them a recognised part of the stock-in-trade of the Labour quack in the ‘eighties, they will have difficulty in showing any reason for their separation from the I.L.P. and the Labour Party. They have demonstrated that Communist theory is barren of hope for the working class.

Lloyd George tells the truth. (1924)

From the December 1924 issue of the Socialist Standard

There may still remain some simple souls who think there exists an essential difference between Liberal and Tory. Be in doubt no longer friend. Lloyd George, who is getting on in years, has been moved to glorify his latter days by a burst of real truth. When one remembers what he has said about his Tory opponents, one can only conclude he wants to appear before Peter with at least one good deed on his record. Anyhow he has set your doubts at rest.

It was at Cardiff it happened, on the night of October 20th, when according to the “Daily News,” he spoke as follows :

  “Now one word to my Tory friends. They are honestly afraid of Socialism. I will tell them how to get it. Destroy the Liberal Party first. (Cheers.)

   I ask the Conservatives : Are you going to take the risk of having no alternative, no support? Are you going to destroy a party which does not agree with you, which takes a different point of view, which looks at things from a different angle, which has a different tradition, but which is just as firmly rooted as you in the existing order?”

So there you have it all in its naked simplicity. Comment is almost unnecessary. We will confine ourselves to emphasising that their difference is merely one of angle, of point of view; not fundamental at all. The Liberal Party is an “alternative,” a “support.” They are “just as firmly rooted . . . in the existing order” as the Tories. The Socialist Party has said so for years. Lloyd George has now publicly admitted it. Then doubt no longer. Join a party with a bedrock difference, not one with a squint.

W. T. Hopley

Quotes from Engels. (1924)

From the December 1924 issue of the Socialist Standard 

“Nature exists independently of all philosophies. It is the foundation upon which we, ourselves products of nature are built. Outside man and nature nothing exists, and the higher beings which our religious phantasies have created are only the fantastic reflections of our individuality.” —F. Engels.

* * *

“Men make their own history in that each follows his own desired ends independent of results, and the results of these many wills acting in different directions and their manifold effects upon the world constitute history. It depends, therefore, upon what the great majority of individuals intend.” —F. Engels’ ” Feurbach.”

A Look Round. (1924)

From the December 1924 issue of the Socialist Standard 

The L.S.D. of Capitalist Remembrance. 

What slimy hypocrites are the ruling class of to-day. Every opportunity is seized upon to pour out tears of sympathy for their victims, when the process is not a costly one; but let it mean dipping into the merest portion of their wealth and, what a difference. Armistice Day is one of those occasions when our masters launch upon us a flood of nauseating cant. It is, we are told, in remembrance of our “glorious dead,” but compare such pretended capitalist sympathy with the treatment meted out to the workers at all times. It would indeed be surprising were it otherwise.

  “At the present time there are 800,000 ex-Service men unemployed, of whom 300,000 are young men not much over 30 years of age, who gave their best years to serve their country. “—Daily Chronicle, 16/9/24.

In like manner their wartime heroes are left to die in want; same paper says (25/10/24) :—

  “Thomas Whitham, V.C., who won the honour when a private in the Coldstream Guards during the war, died of peritonitis at Oldham Royal Infirmary yesterday. Mr. Whitham, who leaves a widow and six children, had been out of work and had had to raise money on his medal.”

The following is also a specimen of our kind masters’ gratitude :—

  “Wages of workmen in the Manchester Corporation Gas Mains Department were yesterday found to be 2s. 3d. short . . . the explanation given was that the sum represented two hours’ stoppage for Armistice Morning. Six hundred workers, all ex-Service Men, are affected.”—Ibid, 15/11/24.

Well might the workers remember their masters’ recruiting appeals : “Isn’t this worth fighting for?” “What will you lack sonny?” May they remember that it was the Labour Party that rendered such able assistance in such appeals. Likewise that it was the same Labour Party that was prepared to use the masters’ military legions as strike breakers when you were fighting to maintain your standard of living during their term of office.

* * * * *

Capital Nonsense.

An applicant at Greenwich County Court said that his landlord, who was a “great Socialist,” refused to accept rent from him. Whereupon the oracle of justice, dipping deep into his reservoir of wisdom, delivered himself of the following : —

   “Probably then he doesn’t want the rent. A Socialist I believe is a person who has no objection to accumulating Capital on his own account but denies the right of other people to do so.” —Star, 4/10/24.

Let us reason ! A capitalist is one who owns wealth in the form of capital : A Socialist is a member of the working class who realises his slave position and works for Socialism. Like the rest of the workers he is poor. It is his class whose wage labour applied to nature’s minerals provides the wealth which the capitalist class dissipate in luxury, spend on wars, armies, navies, etc., or accumulate in the form capital in order to further exploit the workers for profit. Wage slavery never permits of more than a continued poverty existence. The workers’ accumulation is one of misery and insecurity. The Socialist doesn’t deny the “right” of the capitalist to possess capital because he knows that “right” is backed up by the political control of armed forces. What the Beak calls “right’ is called by the Socialist “might.” When the workers organise to control that might the masters will be welcome to the right. We stand for the common ownership of the earth and its control by the whole people, i.e., the abolition of capitalism and its corollary capital.

* * * * *

The Meaning of Poplarism.

We have never doubted the sincerity of George Lansbury’s actions in the interests of—George Lansbury. Through the columns of the “Daily Herald,” 8/11/24. He puts forth an admixture of “Jesus,” “What I Think,” and spurious economics. Says he:—

  “All who possess health and strength should be only too glad to help maintain those unable because of disability to do a full week’s work for a full week’s wage.”

Quite a common mis-statement dear to the Labour Party confusionist, plus the sentiment which is such an asset to Lansbury. He knows that the wages the workers receive hover round a bare cost of living basis, which only suffices to replenish their energy. In the “Herald,” 17/3/24, he wrote of “thousands of miners whose wages had sunk below subsistence level.” presumably by short working time, which had to be supplemented by Poor Law Relief. That section therefore of the working class not required by the masters, either because they are physical wrecks or those whom it is unprofitable to employ, must be retained in some sort of condition by the capitalists who own the mass of the wealth, which constitutes the proceeds of the robbery of the working class. Dare Lansbury deny that? Obviously the masters wish to keep their expenses (rates and taxes) as low as possible, for they come out of their profits.. This is where the Labour leader renders assistance, first by endeavouring to disguise the process of working class exploitation, and second by trying to convince the workers that the masters’ rates and taxes concern them in order to keep them as low as possible. Proof:—

  “The larger Poplar ratepayers who squeal so much about the rates have therefore on the balance been saved at least £250,000 yearly as a result of the Poplar Labour Movement during the last four years.” —Poor Law Officers Journal, quoted Labour Leader, 6/3/24.

The “larger” ratepayers ought, therefore, to be grateful for they pocket an extra million in profit. Those who confuse the workers, knowingly or otherwise, are the best friends of the capitalist, and will merit their appreciation despite the pretence of their opposition. It is clear that it doesn’t matter whose the votes are, because—

   “As your member in the last two parliaments, I desire to thank both friends and opponents for the loyal support which they have given me during that period. “—Lansbury Election Address, October 24th.

As Socialists we know we will meet with bitter opposition from our opponents (Labourites included) : It is significant that while it took us six years to rake up £1,000 the I.L.P. Election Fund contained anonymous £500’s and £l,000’s, and one large employer of labour, Mr. Bernard Barron, while deploring the defeat of the Labour Government could contribute to the Labour Party funds, £5,000 in one gift. (“Chronicle,” 13/10/24.)

* * * * *

Your Work and Their Profit.

“Business Organisation” is a magazine devoted to devices and schemes for extracting the maximum amount of energy from the workers, with the minimum cost. It claims to be disinterested in politics, save in so far as they “check trade and hamper the efforts of our readers to find work for labour and make profit for themselves.” (October.) Eager to obtain insight into this divine arrangement, we read on, and learn of the great Woolworth : "The thought occurred to him that in future he would pay others to work for him, and so large did his business grow that he had never even entered some of his stores.” Another gentleman who also discovered the trick of how to find work—for others—was Mr. Selfridge; he embarked on a world tour a few months ago, “just to show he isn’t indispensable in the business” (Ibid,). The above instances apply equally to the capitalists as a whole. When the workers no longer consider it a privilege to be allowed to fashion a world of pleasure for others, that pleasant world can be theirs.

W. E. MacHaffie

Correspondence. (1924)

Letters to the Editors from the December 1924 issue of the Socialist Standard

Socialist Policy.

Answer to F. L. Remington. 

(1) Your remarks on municipal action have already been dealt with in the answer given in the October issue of the Socialist Socialist. Until you can bring some arguments against our reply your unsupported assertions are worthless expressions of opinions.

(2) To say “the Socialist Party of Great Britain accepts the structure of the working classes (sic) existent industrial machinery in the shape of Trades Unions” (a very verbose phrase which simply means “the S.P.G.B. accepts Trades Unions”) shows a considerable confusion of thought. Practically all who work for a wage have to “accept” Trades Unions where they exist in any strength, whether a member of the S.L.P. or any other Party. It is significant to note that almost every S.L.P.-er that became prominent in the eyes of the public did so by their activities in the Trades Union not by any action in industrial unionism or politics. This confusion of thought is further emphasised by your two statements (a) “the S.L.P. endorses industrial unionism” ; (b ) “the S.L.P. is a political party just as much as is the S.P.G.B.”

As industrial unionism denies political action for the working class your remark proves the S.L.P. to be an anti-political party. The whole question of “industrial unionism versus Socialism” has been debated and dealt with in various back numbers of the “S.S.” which we recommend to your notice.

Another error in your letter is in passing over lightly the matter of “imposing personalities.” Had you read our exposure of the S.L.P. in our manifesto and in various articles in the “S.S.” from August, 1906 onwards, you would have seen that “leaders” with a sheep-like following existed in the S.L.P. since its inception. This was one of the factors that prevented those in England who were fighting the old S.D.F. policy from taking part in the formation of the S.L.P.

(3) It can only be supposed that if you have read the answer to your query on the oath, you have not paid the slightest attention to its contents. You make no attempt to show how the working class can gain control of political power if they baulk at an oath. In fact all your present assertions were met in that reply.—Ed. Com.

* * *

Reply to G. T. Foster.

It is significant that while questioning the definition of Mind given in the article entitled “A Brief Sketch of the Materialist Conception of History,” you fail to give any alternative explanation.

Your statement that “the brain itself is ONLY an idea,” given without the slightest attempt to supply any evidence or reason to support it, is sheer nonsense.

Another unsupported assertion, namely, “We know ONLY modes of our own consciousness” is self-contradictory. Who or what are the “we” that know?

When you can give any evidence for your entirely baseless assertions, it may be worth while to examine such evidence.—Ed. Com.

* * *

Reply to J. Jacobs (Edmonton, Alberta).

Your references to the political antics of the Communists in Canada are noted. Their posing as Labour candidates with a long reform programme of a capitalist nature is very similar to the gymnastics of Communists here. Communists in Canada, once so strenuous for the One Big Union and now shouting back to the American Federation of Labour simply show that they are out to capture the jobs in unions as well as in Labour Parties.

When the working class understands the class struggle it will realise the futility of Communist “Moscow” tactics and the anti-revolutionary character of these so-called Communist opportunists.—Ed. Com.

The Douglas Credit Scheme Exposed. (1924)

From the December 1924 issue of the Socialist Standard

A Review of Douglas and Orage's Credit, Power and Democracy.

From the days of Marx and Engels, Socialists have pointed out that the improvements in the instruments of production added to the continual increase in the applications of science and discoveries to industry, were resulting in the means of production out-running the effective demand for and consumption of products. The periodical crises of the nineteenth century that resulted from these facts brought forward various "remedies," many of a financial character. One of the best known of these was "Bimetalism," or the double standard, which we were told would ensure "stability," in spite of the fact that countries that had adopted the scheme were just as unstable, if not more so, than those with a single standard. But the great favourite idea was the one of supplying "cheap" credit to the small producer or capitalist who was being beaten in competition by the large capitalist. As this "credit" could not—for obvious reasons—be obtained through the usual financial channels, the municipality or the State was called upon to supply it.

The Great War brought about an immense acceleration in the improvements of instruments of production and the applications of science to industry, and a great increase in combinations among capitalists reaching in many cases to the Trust stage. While the huge destruction of products by the war continued accompanied by the withdrawal of millions of men from industry, these means of production were kept occupied. When the war ended a twofold increase in the old problem faced the master class. First, the great demand for products for war having ended, large numbers of workers were thrown out of employment and plants were standing idle. Second, the demobilisation of the huge armies threw another immense number of men upon the streets. At first the cry went up for "mass production" of peace commodities, a cry backed up by the Labour leaders, and war factories were converted as speedily as possible to this end. The result was, of course, easy to foretell. After a short feverish "boom" in production of goods for which there was no effective demand, a fearful slump followed with larger numbers than ever thrown out of employment.

Of course, numerous remedies, old and new, were put forward to deal with this enormous problem, and among them our old friends the money and credit cranks turned up again. Some advocated the abolition of the gold standard. Others the inflation of the currency. And, of course, the question of "cheap" credit cropped up once more. The great point common to all these schemes was that they promised to preserve capitalism while offering enormous benefits to the workers. As the facts mentioned above show this is a contradiction in terms. While capitalism lasts the tendency is for further improvements in the means of production and extended application of science to industry. Not only so, but these improvements and applications proceed far faster than the growth in markets, with the result that the markets are filled up in a shorter time than before and unemployment spreads faster and farther as a consequence. There is no escape from this position, nor any solution of the problem while the private ownership of materials and instruments of production remains. At present the capitalist class is "staving off'' the worst effects of the enormous unemployment by extending Unemployment Insurance, inaccurately termed "the dole."

The work now under consideration is one of these attempts to save capitalism from catastrophe by means of "credit" manipulation. This statement may surprise those members of the I.L.P., etc., who have been mystified by its confused exposition into supposing that its object was to provide a scheme to benefit or even to emancipate the workers. In fairness to the author it must be stated that he makes no such claim himself, for while he says capitalism is breaking down, he proposes the scheme to save society from crashing into chaos. The workers are to remain workers and the capitalists are to continue to be capitalists.

Major Douglas takes about 150 pages to expound his scheme, and Mr. A. R. Orage of the New Age kindly adds another 60 pages of commentary to "explain its general meaning." There was certainly great need for this, but it is doubtful if the object has been accomplished. The author exhibits little knowledge of economics and hardly more of industry. His various and confusing uses of the word "credit" makes it difficult for the non-technical reader to follow his argument, while the student of economics is merely irritated at the mis-statements and misunderstandings of capitalism shown in the exposition. Thus on page 6 we are told that the fundamental policy of a capitalistic manufacturing enterprise—

  is to pay its way as a means to the end of maintaining and increasing its financial credit with the banks.

The most elementary student of economics knows that under capitalism the "fundamental policy" of a concern is to produce profits for the capitalists, and its "financial credit" is only one of the factors in that policy. The first sub-heading to chapter I is entitled "The Fallacy of Marxianism." Yet there is not one word of Marx nor a single statement of Marxianism in the whole chapter. According to pages 22 and 26 Major Douglas imagines that all increases of capitalisation consist of bankers' overdrafts, and it actually is made a part of his scheme. This absurd notion leads to the further fallacy that the banker not only decides what shall be produced, but also the prices at which the articles shall be sold (pp. 32 and 46.). "Credit" is used at one time to mean instruments of production, while later on it is defined as "the correct estimate of the capacity of a community with its plant, culture and labour, to deliver goods and services" (p. 101). Financial credit it the issue of money as overdrafts, etc. Mr. Orage explains on page 192 that "consumable goods plus capital goods and imports make up between them the sum of the real credit produced," but on page 197 he defines real credit as given on page 101. Further confusion is shown in dealing with capital. On pages 28-29, we read that "capital represents potential production of ultimate commodities," while on page 34 it is described as "tools, factories, intermediate products." In the same paragraph it is asserted that the prices of ultimate products turned out in a limited time includes the total cost of tools, factories, etc., although the latter may continue to give service for years after. The fact is, of course, that the average life of a machine, tool or factory is taken and its cost split up among the number of articles produced during that life, and therefore the "prices of ultimate products" for any period less than this life will not contain the whole of the capital cost. While it is admitted on page 42 that the "individual entrepreneur" has been superseded by the limited liability company, both Major Douglas and Mr. Orage retain and repeat the superstition that the capitalist "administers" industry.

Numerous other fallacies are scattered throughout the book but we must pass them over to examine the scheme proposed.

Major Douglas avoids numerous difficulties and questions by laying it down that everything economic is "credit." Raw materials, instruments of production, and finished products are all "credit." This credit is the creation equally of consumers and producers because without the consumer the goods produced would be useless. Consumers and producers appear in their joint characters as "members of the public." The first point to be grasped clearly is that the capacity of our means of production is far greater than our actual production. The total capacity to produce, or "the correct estimate of ability to produce and deliver goods as and when and where required " (p. 189) is called our "real" or "national" credit. When giving an illustration, however, some further confusion is introduced by sometimes limiting "real" credit to means of production. Whatever definition may be taken, the object of the scheme is to distribute the margin between the amount of consumable goods produced and the amount of real credit, among the consumers. It is estimated that the present production of real credit is four times greater than the production of consumable goods. The scheme proposes to distribute this difference or margin by regulating the price of consumable commodities in this ratio. That is to say, that consumable goods would be sold at one-fourth the total cost of production, thus distributing to the consumer his share of the national credit at the moment of purchase. For the purpose of illustration the coal industry is taken and the scheme worked out in some detail on that product. Coal besides being a consumable good is also used as a means of production, but, as here, it increases the "capacity to deliver goods and services out of all proportion to the 'cost' of raising it" (p. 119) the manufacturer is already in possession of his margin, or rather more than his margin, and he is to pay over this excess in the form of an increased price—"an agreed percentage"—above the cost of production. The question of coal for export would be decided by our need of coal and the conditions of the world market. We thus have "domestic" coal sold at a quarter its cost of production, "commercial" coal sold at "an agreed percentage" above the cost of production, and "export" coal at a price determined by the world market. It is assumed as probable that the total of above prices will not equal the total cost of production. Then what is to become of the poor coalmine owner? Quite simple. The margin between the total prices and the total costs of production—including interest, dividends, etc.—will be made good to the coalowner by the Government in Treasury notes issued against the National Credit. The larger the amount of National Credit the lower will be the price of domestic coal, and the lower the cost of producing coal, the lower will be the prices of goods into the production of which coal enters. This is where the coal miner is considered. As he is a consumer of numerous articles of the latter kind, it will be to his benefit to produce coal as cheaply as possible so as to lower the prices of the articles he requires. Further, as these articles will be consumable goods their price will be regulated by the ratio between their cost of production and real credit, as in the case of domestic coal. Hence another inducement to the miner to increase real credit, so far as coal forms a part of it by working hard and cheap.

Such is the proposal, and its application to all branches of industry producing consumable goods will, presumably, follow the same line. What would happen in the industries that only produce "intermediate products" as machines, engines, ships, railways, factories, etc. we are left to guess.

The next point is how the scheme is to be brought into operation. The object to be attained is that "the public acquire control of credit-issue and price-making." On page 86 we are told "There is no hope whatever in the hustings." Yet the second clause of the scheme, calls in the Government to enforce the scheme upon industry. And clauses 1—2 and 6 of Part 2 call in the Government to carry out important details.

A producers' bank is to be established in each industry. The Government shall recognise this bank as an integral part' of the industry and representing its credit. It shall ensure its affiliation with the clearing house.

The shareholders of the bank shall be all the persons engaged in the industry, who shall have one vote each at a meeting. The bank as such shall pay no dividend.

The directors (of the industry) shall pay all wages and salaries to the producers' bank in bulk and the bank shall allocate to each employee's account his wage or salary.

Once the bank is in operation all subsequent expenditure on capital account shall be financed jointly by the colliery owners and the producers' bank in the ratio which total dividends bear to salaries and wages. The benefits of such financing done by the producers' bank shall accrue to the depositors.

The capital already invested in the mining properties and plant shall be entitled to a fixed return of, say, 6 per cent., and, together with all fresh capital, shall continue to carry with it all the ordinary privileges of capital administration other than price-fixing.

The Government shall reimburse to the colliery owners the difference between their total costs incurred and their total price received, by means of Treasury notes, such notes being debited, as now, to the National Credit Account.

In the case of a reduction in the costs of working, one-half such reduction shall be dealt with in the National Credit Account, one-quarter shall be credited to the colliery owners, and one-quarter to the producers' bank.

Other clauses deal with the questions of prices, accounts, etc., that need not detain us here.

The first point that sticks out from the scheme, like a column on a plain, is that the capitalist and capitalism are to remain. Public control of credit issue and price-making is to result merely in the capitalist being guaranteed his dividends from the National Credit. "But prices will be lower for all consumers," we will be told, "and therefore the workers will benefit as consumers." The remark is fallacious, for while every producer is a consumer, every consumer is not a producer. Those consumers who live, without producing, on profits—whether in the form of interest or dividends—will, first, have their profits guaranteed to them, and second, their purchasing power enormously increased by the fall in prices. But the worker remains a wage-slave and his wages will be determined by his cost of living, modified by the pressure he may be able to exert through his Trade Union. Mr. Orage claims that under the scheme "the exclusively proletarian Trade Union ceases to be necessary." On the contrary they will be required more than ever for an employer whose dividends are guaranteed is in a far stronger position than one who has to use his dividends in a fight with the workers.

Thus the workers will be called upon to work harder and produce more in order to cheapen consumable goods for the capitalists, while the workers' own position will be worse relatively, and even absolutely. Major Douglas says quite definitely that if the demand for the product falls off "the industry would produce the same amount of real purchasing power for distribution among its members through the agency of dividends with less work, wages and salaries" (page 124, italics ours). In other words the exploitation of the workers would increase under the conditions mentioned.

It may be objected to this that under the scheme every worker in the industry would be a shareholder in the bank, and could draw "dividends" on his portion of the shares the bank holds for credit advanced for capital expansion. Or, as Major Douglas puts it:

  So that as improvements in process displaced men from industry the purchasing power they had helped to create would be available in the form of dividends. (P. 125.)

Under the illustration given in the book the ratio of wages and salaries to dividends is estimated as 9 to 1; so that it £100,000 were required for an extension of the industry, £90,000 would be advanced by the producers' bank and £10,000 by the owners of the industry. But this clause is sheer farce. It may astonish the ignorant Major Douglas and his followers to know that many industries extend their business out of revenue without any fresh capitalisation at all. The big banks have been doing it for years. Even where capitalisation takes place later on, it is usually done to hide large profits. The owners of an industry under this scheme need not ask for a single £1 note from the producers' bank, but could carry out their extensions as "expenses of business" and the amount would be guaranteed by the Government. Even if it suited the owners' interests to call upon the producers' bank, the amount called need never be large enough to balance the owners' shares, while to argue that the few shillings—at most—that would be the share of each of the hundreds of thousands of workers in the industry, would maintain a man out of work, is absurd.

It is thus easy to see that the scheme was drawn up with the object of preserving the economic position of the small capitalist and dividend drawer from the result of what Major Douglas thinks is an impending collapse. The workers are to be deceived into fancying they are capitalists or sharing in the control of industry by a few shares collectively owned through a bank, just as many are misled by the "profit-sharing" schemes in operation in so many industries to-day. But the scheme will fail to find general acceptance because the large capitalists and financiers are not interested in it, nor even in Major Douglas' cry of "chaos coming," while the smaller capitalists do not possess the power to put it into operation.

The portion of the book written by Major Douglas is written in the bombastically ignorant and offensively arrogant style of a youth from a so-called Public School. Mr. Orage, as an older and more experienced propagandist, is far more careful as he sees the necessity of converting or hoodwinking the workers into accepting the scheme before it can be tried.

But its fallacies seem too glaring even for his hopes.

The book is priced at 7s. 6d. The publishers should have made it £7 6s. to prevent any worker who might have made a bit of overtime one week from wasting money upon its purchase.

Jack Fitzgerald

The Class War . . . And The Facts Behind it. (1924)

From the December 1924 issue of the Socialist Standard

Mr. J. H. Thomas recently said that the “talk about a class war left him cold.” In a leading article, 14/11/24, the “New Leader,” while agreeing with him in “denouncing class hatred,” says :—

  But we think it almost the gravest mistake which a Labour Party could make to ignore the fact that a process which is usually called the Class struggle is the most vital fact of our lives.

According to the “Daily Chronicle,” 15/11/24, Mr. C. G. Ammon “remarked that they all agreed that, so far as possible, they were not desirous of carrying on a class war. . . . They must admit that the class war was with us.”

From the same source we get the following : “Dr. Salter, M.P., also declared that class war was a fact. It was a struggle between the people who were exploited and those who exploited them, and there was no possible method of reconciling the interests of the two.”

One it leaves cold. To another it is the most vital fact of our lives. Another admits its existence, but would not prosecute it; while the fourth declares it a fact with no possible method of reconciliation. Surely it is time that the Labour Party seriously considered whether they do or do not believe in the existence of the class war.

But neither the declarations of these gentlemen nor the flaring headline of a Sunday picture paper "No more class war” proves or disproves the existence of that struggle. The class struggle and its growing intensity is the one outstanding feature of modern times. The pathetic denials of capitalist agents like Mr. Lovat Fraser deceive no one, except those who want to be deceived. The facts are patent to anyone capable of observation and thought. Millions of workers organised on the industrial field to defend themselves against the constant efforts of still more strongly organised employers to reduce their standard of living and bind them more completely to the wheels of industry.

Modern society is split clean across by the antagonism between those who produce wealth but do not own it, and those who own wealth though never assisting in its production. Disputes follow one another in rapid succession over the whole field of industry between the class that owns and controls the means of wealth-production and those who own nothing but their energy.

It is in this last elementary fact that the germ of the class struggle lies. Unable to obtain access to the means of life, the propertyless human being is compelled to sell his energy to those who own. He becomes a wage-slave and must bargain with the capitalist for a wage that will satisfy his wants. As the number of workers seeking to sell their energy is nearly always in excess of the demand, bargaining power is on the side of the buyers, or masters. It is a simple business axiom that when a commodity is plentiful it is generally cheap. But cheap labour-power means a low standard of living, and the owner of labour-power being human and more or less intelligent resents being thrust ever more deeply into poverty; while at the same time those who cut down his rations make huge additions to their bank balances and finding that markets have somehow become glutted, stop production for a time and turn their workers on the streets. Slow starvation on the dole for a time and then, back in the factory to repeat the process with, possibly, a lower wage and managers and overseers hustling and driving with feverish haste that they may be first with their goods on the awakening market.

On the one hand a super-abundance of wealth. On the other poverty to the verge of desperation. Whether they do little or nothing, those who own the means of life increase their wealth daily beyond their power to spend it. The propertyless wage-slaves are driven by the fear of the sack, and the more they yield the poorer they become.

The capitalist increases his wealth by machinery and methods that enables one worker to do the work of many and then reduces that worker’s wages. He does nothing to assist production, but his overseers—themselves urged on by fear of the sack—in his interest, are constantly sacking and speeding up and reducing wages. This is the class war, waged from the employers’ side and accompanied by an avalanche of propaganda that attempts to reconcile these conflicting interests.

But the antagonism cannot be hidden. It cannot be smoothed away by patriotic blather or glib phrases about the indivisible interests of employer and employed. Whether they want to "carry on a class war” or not the workers are compelled to fight back. Whether they understand how to carry the fight to a successful issue or not millions all over the world realise that it is necessary to organise against the capitalist class.

The knowledge that should go with that realisation awaits them in Socialism. Let them acquire it and, instead of being always the victims of capitalist aggression they will fight back on an equal footing. There is a class war; consciously fought on one side, it is true. Talk of it may leave Mr. Thomas cold, and Mr. Ammon may not be desirous of carrying it on, but the “New Leader” is right for once when it says that it is the most vital fact of our lives; however much they may qualify it next time the Labour Party takes office.

F. Foan

Put This In Your Collection of Golden Deeds. (1924)

From the December 1924 issue of the Socialist Standard

You will of course have the Boudel Massacre, the Amritsar Horror, the Congo Rubber Atrocities, etc., duly docketed. The following extract from Mark Twain’s recently published Autobiography, quoted in the "Daily News,” October 25th, is a useful addition to Capitalism’s Book of Golden Deeds.

Mark Twain was roused to a white heat of anger by the killing of six hundred Moros by American soldiers in the Philippine Islands in 1906.

   "With six hundred engaged on each side, we lost fifteen men killed outright and we had thirty-two wounded.  . . . The enemy numbered six hundred—including women and children—and we abolished them utterly leaving not even a baby alive to cry for its dead mother.
   "This is incomparably the greatest victory that was ever achieved by the Christian soldiers of the United States.”

President Roosevelt sent a formal message of congratulation to the commanding officer. "His whole utterance is merely a convention,” comments Mark Twain. "Not a word of what he said came out of his heart. He knew perfectly well that to pen six hundred helpless and weaponless savages in a hole like rats in a trap and massacre them in detail during a stretch of a day and a half from a safe position on the heights above was no brilliant feat of arms, and would not have been a brilliant feat of arms even if Christian America, represented by its salaried soldiers had shot them down with Bibles and Golden Rules instead of bullets.”—From Mark Twain Autobiography extract in "Daily News,” 25/10/24.

A Brief Sketch of the Materialist Conception of History - Part 6 (1924)

From the December 1924 issue of the Socialist Standard

Link to Part 5.

Part 6
Since the whole history of the State shows that the ruling class of any given period use the State machinery as a means of safeguarding their material interests, to the detriment of the subject class, the struggle of the classes necessarily takes the form of a political struggle—a struggle for the control of the means of life through the control of the State. Only by this means is a ruling class to be dislodged from power, and a new form of society established. Revolution, then, in a society comprising different classes, is an essential part of the process of social change; it is inevitably implied in the evolution of the tools of wealth production and distribution, and the need for revolution arises when a certain stage in economic development is reached. The revolution has to be carried out by the rising subject class in order that old and obsolete social institutions which do not conform to the requirements of that class may be destroyed.

It will be gathered from what we have said that the class struggle has a materialistic basis. But this is often obscured in great historical events by the “idealism" displayed in the struggles. The abstract ideas of justice, freedom, humanity, etc., have at all times been invoked as weapons in the struggles. So much so, in fact, that many who have looked back upon past history have regarded the “idealism" as though it were independent of material causes. There could be no greater mistake. To take the French Revolution of 1789 as an example. That revolution was in reality the result of a struggle between the ruling feudal nobility and clergy and the then rising capitalist class. In that struggle for power the rising capitalist class, who saw in the domination of the nobility the means of hindering their advancement, found it necessary to seek the support of the peasants and propertyless workers of France. All sorts of promises were made to obtain that support. Since the peasants and workers were likewise groaning under the tyranny of feudal rule, the promises made, together with the great rallying cry of the bourgeoisie for “ Liberty, Equality, and Fraternity," met with response from the “lower orders.” But the slogan of “Liberty, Equality, and Fraternity” turned out to be no more than a reflection of the desired political and social tights of the bourgeoisie. As far as the peasants and proletarians were concerned, they had merely assisted in substituting one set of rulers for another.

So we could continue, in speaking of other revolutions, to point out that, although disguised by religious or secular idealism, the struggles have been between classes for social supremacy. Whilst the class struggles of the past have resulted in the overthrow of one class by another, and thus class society has been perpetuated, the modern class struggle must of necessity end in the abolition of classes. Social development has so simplified the class divisions in modern society that now only two classes face each other in society, with only one class needing emancipation—the working class. With the triumph of the working class, the slave class of to-day, society will witness the winding up of class society and human slavery.

Let us now sum up our sketch of that theory of history formulated by Marx, Engels, and Morgan. We have seen that the materialist conception of history regards the changes that have taken place in the forms of Society as being mainly caused by the changes in the means of wealth production and distribution. Or as Morgan would say, the upward march of mankind is largely to be explained by “their successive arts of subsistence."

We have also seen that these economic changes, though brought into existence by man himself acting upon his natural surroundings, so alter the conditions of human existence, that mankind are more or less compelled to shape their mode of living accordingly. Further, we have pointed out that our view of historical development is not so one-sided as to exclude from human history every other factor than the economic one. Man's ideas and ideals, his geographical and climatic conditions, are all embraced by our conception of history, and placed in their true position. The influence of ideas in historical development has engaged most of our attention in this sketch, for the reason that, it is upon that side of our theory that most criticism has been levelled. Since the influence of geography and climate has only been implied by us here and there, it may prove useful if we have a few words to say about these before concluding; if only to show that Marx was not unaware of their influence on human society. Whilst we assert that the economic development is the motive force behind social change we are, at the same time fully aware that geographical and climatic conditions form part of the background, so to speak through which many of man’s technical inventions have taken form. Thus the needs for making fire, clothes and shelter must have arisen when our primitive ancestors emerged from the tropical or sub-tropical forests on to the open plains, where they were more at the mercy of climatic conditions. Hence the invention of the crude technical appliances of that time to overcome the climatic conditions. But even when we reach more modern times, when man had enormously increased his hold upon natural forces, we observe the influence of geography and climate. In dealing with the question of the physical conditions more or less essential to the capitalist form of society in its early stages, Marx, in the following lengthy but luminous passage, says :—

     Capitalist production once assumed, then, all other circumstances remaining the same, and given the length of the working day, the quantity of surplus-labour will vary with the physical conditions of labour, especially with the fertility of the soil. But it by no means follows from this that the most fruitful soil is the most fitted for the growth of the capitalist mode of production. This mode is based on the dominion of man over Nature. Where Nature is too lavish, she “keeps him in hand, like a child in leading-strings.” She does not impose upon him any necessity to develop himself. It is not the Tropics with their luxuriant vegetation, but the temperate zone, that is the mother country of capital. It is not the mere fertility of the soil, but the differentiation of the soil, the variety of its natural products, the changes of the seasons, which form the physical basis for the social division of labour, and which by changes in the natural surroundings, spur man on to the multiplication of his wants, his capabilities, his means and modes of labour. (“Capital,” Vol. 1, page 522.)

However, as previously indicated, the influence of geography and climate, important as they are in the study of the make up of human society, recedes in importance as economic development advances.

Robert Reynolds

(To be continued.)

Link to Part 7.

How Labour Ruled Mespot. (1924)

From the December 1924 issue of the Socialist Standard

The Truth About The Slaughter

When it became known that bomb-dropping was regularly used by the Labour Government as a means of peacefully persuading Irak Tribesmen that British capitalism had a better right in their country than they had themselves, many simple supporters of the Labour Party were shocked. They had supposed that Empires can be built on love and maintained by soft words, and they were greatly relieved when Mr. Leach explained the whole matter away.

Mr. Leach accounted for British occupancy of the territory by saying that it was a point of honour to remain and fulfill "our” pledges; and he was able to give the assurance that— 

  under our administration British air operations have so far caused no deaths. Thanks to the method of warning notices, submission takes place five times out of six without recourse to bombs, and has succeeded in the remaining cases through the destruction of property and cattle. —Daily Herald, July 15th, 1924.

Now Lord Thomson, Chief of the Air Ministry, of which Mr. Leach was Undersecretary, has disclosed the real facts. It was not honour but capitalist interest in oil which kept the Labour Government in Irak, and with regard to the bomb-dropping Mr. Leach appears to have resorted to complete suppression of the facts.

The following quotation is from a lecture given by Lord Thomson at a meeting of the Central Asian Society on November 21st. (“The Times,” November 22nd, 1924.)

   After briefly tracing the route followed in his tour, Lord Thomson brought home to his audience the efficacy of bombing by describing the manner in which the recent Wahabi invasion of the Transjordan was crushed. The British forces consisted solely of aeroplanes sent out at the shortest possible notice, backed by armoured cars. The effect of our air attack was appalling Some 700 of the tribesmen were killed and the rest, seized with panic, fled into the desert, where hundreds more must have perished from thirst. Unless some such punishment as swift and terrible as this had been inflicted, the task of restoring order would have been long drawn-out, and in the end more costly in lives and money, while the results would not have been so lasting.
   Lord Thomson went on to say that it might be true that oil was the key of the Arabian riddle, though he considered that wheat-production, for some years at least, held greater possibilities. The primary necessity, however, was security. The country could best be opened up by making the process a gradual one. By using it as a link in the chain of Imperial communications, this would be achieved.
    On the question of the duration of British protection in Iraq, Lord Thomson said that Britain had promised an independent Arab State, and we must honour our pledge, which could only be done by remaining in the country until it could defend itself. We could wriggle out of our obligations in various fashions, but the immediate consequence, in his opinion, would be anarchy, disorder, and confusion. Somebody would have to restore the situation, and if we did not, the Turks would. In the present state of affairs, the British Air Force in Iraq was the cement which kept the bricks together. He hoped that the task we had undertaken would not be left unfinished by any form of withdrawal.

Violence and the Social Revolution (1924)

From the December 1924 issue of the Socialist Standard

It is customary for our opponents to represent the Social Revolution as an orgy of bloodshed. They profess to believe that violence, in various forms, is its essential feature. Thus Mr. Arthur Henderson, Secretary of the Labour Party, in an article in the "Daily Herald" (November 19th), refers to "the odour of blood and hatred, etc, which clings to the idea of the Social Revolution." He wishes this "odour" to be dissociated from the programme of "fundamental economic transformation" proposed by the Labour Party, and expresses the opinion that the Party has suffered from some of its adherents talking about the "iniquities of the capitalist class," and "the class war."

Before proceeding to examine this conception more closely, it is worth noting that the above Mr. Arthur Henderson was for some considerable period a member of a Government which, among others, was officially responsible for the slaughter of millions of members of the working class. Apparently Mr. Henderson's aversion to blood and hatred does not prevent him from helping to carry on a war in the interests of the ruling class.

The same remark applies to numerous other members of the present-day "party of peace."

Another point which calls for comment is the fact that none of the proposals of the Labour Party which have found practical legislative shape involve any "fundamental economic transformation." On the contrary, every one of these proposals has always recognised the legality of the ownership by its present proprietors of the mass of wealth which we refer to as the means of living, that is the land, railways, factories, etc.

An economic transformation could only be fundamental if this legal right of the owner-class was abolished, through the conversion of the means of life into the common property of the whole community. The dispossession of the master-class by the wage-slave class, that is alone a fundamental change since it upsets the very basis of the existing social order; and that is precisely the essential feature of the social revolution. Any violence there may be will be entirely incidental, and will obviously depend upon the nature of the resistance offered by the master-class to the abolition of their privileges. So long as the master-class control the political machinery and along with it the major force in society it is clear that a revolutionary organisation is not in a position to use force with any chance of success, and consequently has no interest in doing so. On the other hand, once the revolutionary party has conquered political power the force it will exercise to carry out its object will then be "constitutional," i.e., the act of established authority.

The Labour Party along with their Communist supporters encourage the idea that revolution and political activity along peaceful and legal lines are in some way opposed to one another. The Socialist Party denies such opposition. With the social revolution as its avowed object it proclaims the necessity of the workers becoming organised consciously and politically for the conquest of the powers of government (see Declaration of Principles) as the means of accomplishing that object. Its activity consists in endeavouring to convince the workers of the need for Socialism, which consequently brings it into conflict with all parties which seek to persuade them that some other object is worthy of their support.

In conducting this activity we are guided by the fact that the interests of the workers and their masters are opposed to one another. The established order is responsible for poverty; it is therefore to the interests of the workers to abolish it.

At the same time the present basis of society provides the few with wealth. We need not be astonished then they they defend it. This elementary fact is continually being obscured by reformers of every description.

They profess to be able to harmonise class interests and see no harm in exchanging political support with the parties of the masters. Thus the Labour Party held office by consent of a majority of Liberals and Conservatives in the late Parliament. Such a position would be inconceivable in the case of a Socialist Party. Acting in the interests of the workers, it would oppose the parties of the masters at every step, and would consequently meet with their opposition in return. Such a party can only exist and develop as a result of an increasing mental grasp by the workers of their own position.

Mr. Arthur Henderson and his associates fear such a development. Hence their aversion to any discussion of the class war. The fact of such a conflict in society, evident throughout every section of economic life, must be kept apart from political issues to suit their ambitions to be successful statesmen. But economic evolution is no respecter of personal ambitions.

The class war continues and becomes more intense in spite of all efforts to hide it.

The question is not fundamentally one of morality. The Socialist Party does not talk of the iniquity of the master-class. They, like ourselves, are the creatures of social development. Consequently we do not howl for their blood. Candidly, it is their property we want, and if they are determined to die rather than yield, die they must; but we do not imagine that social evils are due to their sins or that any altered outlook on their part will remove these evils. The system is the cause of these evils, and the system must be abolished. Instead of abolishing the system the Labour Party proposes to camouflage it by turning shareholders into Government Bondholders. They simply propose to paint Capitalism red (like a pillar-box) and call it Socialism.

The social revolution is the only logical outcome of the existing struggle between the classes. The master-class cannot exist without a slave-class and that class in its turn cannot exist except as a result of a continual conflict with its masters for its means of subsistence.

Strikes and lock-outs are not the results of mere differences of opinion. They proceed from an antagonism of interest. In order that the masters make a profit, wages must be kept as low as will allow the worker to produce that profit. Both sides realise this in practice, however little they grasp its implications in theory; but it is not the workers' interest that the masters should make any profit out of them. Hence their struggle over wages questions.

Wages, however, become more and more insecure; unemployment increases and wages fall. What outlook, then, has the wage-slave? No hope, certainly, under capitalism.

Emancipation from want can only with the abolition of class-ownership of the means of life, i.e., in the social revolution.

The common ownership of the means of life, with production carried on in a socially-organised manner for the provision of food, clothing and shelter for all, that is Socialism, the object of the Socialist Party, the party of the Social Revolution.

Eric Boden