Decimal coinage (1974)

From the June 1974 issue of the Socialist Standard

The 70th anniversary issue of the Socialist Standard carried throughout its pages a series of snippets from old Socialist Standard articles highlighting the SPGB's unique position on issues of the day. Where possible, I've provided a link to the full article.

. . . Not that we are concerned about a decimal system of coinage. Its obvious efficiency as a labour-saver may be admitted, but is hardly likely to appeal to the unemployed clerk in post war days. Also, we are expecting to establish Socialism before Mr. Craig gets even a good start with his scheme to revolutionise the coinage, and under Socialism, in spite of Karl Kautsky, we shall have no use for either mils or £ s. d. There will be neither giving nor receiving of change, nor weeping and wailing and gnashing of teeth over the, too late, discovery of a bad ‘un. And if, as Mr. Craig says, the ha’penny has killed the farthing—poor mite! —Socialism will kill the damned lot.

[From the book review of Sterling Decimal Coinage by Walter L. Craig, Socialist Standard, June 1918]

50 Years Ago: Decimalisation (2021)

The 50 Years Ago column from the February 2021 issue of the Socialist Standard

Whatever difficulties people may meet with in handling the metric currency changes on 15 February the changes themselves will have no effect at all on the main operations of the British monetary system or its standing in world currencies. New names will be given to some old coins, and three new ‘coppers’ will appear, the new 2p, 1p, and ½p but the total amount of ‘copper’ coins, about £200 million, will not be altered on D day, nor will the notes in circulation, about £3,660 million. One change has however already been introduced which distorts somewhat the Bank of England’s weekly figures of note circulation. This was in November 1970 when £96 million of ten-shilling notes ceased to be legal tender, thus dropping out of the Bank of England’s note figures, having been replaced by the same quantity of the ten shilling (50p) ‘silver’ coins.

After D day, as before, the pound will still have the same exchange rate with the dollar (about $2.40), and with the rest of the currencies inside and outside the European Economic Community.

This does not mean that the changes have no great significance; this will only become apparent some years ahead if Britain joins the European Six and if the Six themselves succeed in setting their, at present deadlocked, negotiations about moving towards a single European currency.

The D day changes are a first step aimed at an eventual situation in which there will be only one currency covering the whole of Europe, just as the dollar covers the whole of the USA and the rouble the whole of Russia.

(Socialist Standard, February 1971)

Coining it in (2000)

TV Review from the September 2000 issue of the Socialist Standard

Viewers of the 1970s retrospective series currently running on BBC2 would have done well to tune in to Secret History (17 August) on Channel Four instead. If studied wackiness is your thing, there was nothing to beat this particular programme—called “Funny Money”—about the joys of Britain’s move over to decimalised currency. It was an entertaining and well put together journey through the various research proposals, government White Papers and newspaper campaigns which acted as a prelude to the abolition of the old pound shillings and pence monetary system that was in use in Britain until 1971.

The programme included interviews with the politicians and civil servants in charge of the changeover, most notably the impish-looking civil servant who led the research into decimalisation in Britain and who then led the team whose task it was to prepare British business and consumers for the move over to the new system. At the time it was clear that he found the fuss surrounding the entire thing hilarious, and looking back on it more hysterical still—in fact, he can barely stop laughing.

It is difficult indeed to get inside the minds of people whose attachment to an inanimate object of little intrinsic worth is such that they will launch campaigns to “save” and “protect” it. We are not talking seals or whales here, but sixpences and ten bob notes. Such was the attachment to the old system that many proposed replacing it with a ten shilling system which would have abolished the old pound completely and replaced it with a ten shilling unit of currency called something like “The Royal”. Given their current political stance it is ironic that foremost amongst those in favour of this system of abolishing the pound was the Conservative Party. Indeed, the programme contended that the majority of MPs were probably in favour of it and the decimal system we now have was only pushed through on the Labour whip at the time because it was Harold Wilson and his Chancellor of the time, Jim Callaghan, who was driving it. When the Tories under Heath won the 1970 general election they implemented the proposal they had previously campaigned against and Britain adopted the system of one hundred new pence to the pound, replete with an oddly-shaped fifty pence piece and minus the sixpence and ten bob note.

Money, money, money 

If Secret History’s interviews with the top civil servants of the time are anything to go by they expected little short of blood on the streets when the changeover finally came. They had run a low budget public information campaign aided by Max Bygraves and periodic, pertinent references to decimalisation in Coronation Street. Instead, on “D-Day” itself, 15 February, the phones of the decimalisation task force stopped ringing and they sat in their offices laughing as one of the greatest fusses over nothing in British economic history fell into place. Soon the newspaper campaigns stopped, the silly season stories about young children swallowing the new two pence piece were put to rest and even the barmy bloke on the south coast whose gents outfitters shop refused to recognise the new currency eventually gave up the ghost. All that was left was the residual suspicion that decimalisation had increased inflation, though new scapegoats for that (the trade unions) were just around the corner.

The one possible failing of the programme, delightfully made as it was for the most part, was that it failed to explore the obvious modern parallel: the potential introduction of the Euro as a currency to replace the pound sterling. If the public could grasp the operation of the decimal system within a relatively short period of time and with few lasting complaints, the euro should be no problem, especially as it is also a decimal currency and doesn’t therefore mean a changeover to a completely different system of monetary accounting.

Today, of course, there are another breed of “save-the-pound” pranksters in our midst. This time they have managed to achieve something that decimalisation couldn’t—they’ve split the historically dominant political party of capitalism in this country, the Conservative Party. The modern “save-the-pound” campaign may have sounder basis in the reality of capitalism than opposition to decimalisation ever did (for some sections of the capitalist class at least) but its petty nationalist and parochial rhetoric is almost identical.

Of course, Secret History failed to touch upon the fact that while all this controversy about Britain’s currency has been raging over the last thirty or forty years, the alternative campaign for the complete abolition of all money and monetary exchange has been ongoing—in the pages of this journal and elsewhere. We must concede that it is an educative process that is certainly taking longer than the changeover to decimal currency did, but it will be worth the wait. Unlike decimal currency or the euro, the abolition of money really will be something worth waiting for and eventually, a source of real joy for billions and not just for a handful of Treasury civil servants.

DAP

Editorial: Let’s have free access (1971)

Editorial from the February 1971 issue of the Socialist Standard

“Abolish money? That’s impossible.” Is it? Surely all we need to produce wealth are human beings who are prepared to work and materials from nature. So if it is impossible to abolish money, it cannot be because money is an essential ingredient of the production process.

Before we go any further let us establish what money is. The metal discs and coloured paper which people carry around with them are not money. They are only almost worthless tokens for the real thing— gold. Gold of course is itself wealth in that it is the product of human labour on nature-given material. This is an important point since many people assume that money itself is not wealth, but merely a voucher entitling a person to so much wealth of his choice.

Money is useful wherever wealth is exchanged. Exchange is a simple word whose meaning should be clear —when things are exchanged one is given in return for the other—but it is commonly confused with distribution. When things are distributed they are not exchanged; they are merely being taken from one place to another. The work involved in this is strictly speaking part of the process of producing wealth. Money, then, does not distribute wealth. Wealth is distributed by men loading and driving lorries or trains or ships or planes.

Perhaps this confusion arises because the word “Distribution” means sharing-out as well as dispersing and so fits in well with the mistaken view that money is a voucher entitling a person to such-and-such a share of the wealth that has been produced.
Historically, the most common kind of exchange has been that of equivalents and this is the only kind that need concern us now. So much wheat would be given in return for so many sheep or so many pots in return for so much cloth. This process of barter is cumbersome and becomes impractical when exchange grows to any extent. At this stage the need is felt for something that can be exchanged for anything else — money, for that is what money is, an item of wealth that can be exchanged for any and every other item of wealth. We can now see why money is itself, and must be, wealth. For, with the exchange of things of equal value, nobody is going to give his wheat or sheep or pots or cloth in return for something that is not worth the same.

Exchange implies something else, too. It implies that the wealth to be exchanged is owned by different people. After all, if one person or one community owned all the wheat as well as all the sheep, the question of exchanging them just would not arise. Exchange presupposes the private ownership of wealth.

This is why the establishment of the common ownership of the means of production and distribution will mean the end of exchange and so the disappearance of money. All the wealth that is produced, as well as the means and instruments for producing and distributing it, will belong to the whole community so that the problem will be simply to distribute it to where it is needed. This is just a question of organisation. When the wealth has reached the stores then people can freely take of it what they need. This — free access — is our alternative to money.

We are witnessing how the other alternative works in the present upset over the introduction of a decimal coinage in this country. The official propaganda, a vastly expensive advertising campaign, has been directed at getting us to understand the new system and to accept it. We have seen the photo-strips of the crotchety old lady being won round to a decimal enthusiast. We have had, coming through the door with the detergent coupons, the booklet from the Decimal Coinage Board.

And we have been told that it is all to do with efficiency. Decimals will be easier to work, the system will save money in the long run. It will bring the British currency somewhere into line with those of other countries and, as we point out elsewhere in this issue, is a step towards a common European currency. What this amounts to is that decimal coinage is an efficiency measure designed to benefit British industry and commerce, by which is meant the owners of industry, by which is meant the British capitalist class.

It has yet to be demonstrated, how “efficiency” helps the other side, the people who have to bumble through the shops with the unaccustomed coinage, the people who have to worry about whether they are being swindled in the changeover, the people whose lives depend on the wage which comes in the form of money. The interests of these people — the working class, the vast majority of society — are not concerned with “efficiency” or export drives or international trading tie-ups or rearrangements of currencies.

What the change to decimals does show up is the basic inefficiency of capitalism. The apologists for the system tell us that money is itself an efficient thing, that it oils the wheels of production and distribution. Yet here we have had a situation in which those same apologists have been telling us that money is a hindrance, that the different currency systems lead to inefficiency and we need a huge, expensive, time consuming propaganda campaign and a mighty upheaval to adjust it all.

Yet if we are interested in efficiency (as we are) there is something which is of top priority. If we want a society where wealth can move around the world freely, where it can be produced as human beings need it, we must think about a system which excludes money. The capitalist social system hinders distribution and restricts production. Its priority is not efficiency but profit for a minority. It must be swept away and replaced by Socialism, the world of free production and access.

Decimalisation (1971)

From the February 1971 issue of the Socialist Standard

Towards a European Money System
Whatever difficulties people may meet with in handling the metric currency changes on 15 February the changes themselves will have no effect at all on the main operations of the British monetary system or its standing in world currencies. New names will be given to some old coins, and three new ‘coppers’ will appear, the new 2p, 1p, and ½p but the total amount of ‘copper’ coins, about £200 million, will not be altered on D day, nor will the notes in circulation, about £3,660 Million. One change has however already been introduced which distorts somewhat the Bank of England’s weekly figures of note circulation. This was in November 1970 when £96 Million of ten shilling notes ceased to be legal tender, thus dropping out of the Bank of England’s note figures, having been replaced by the same quantity of the ten shilling (50p) ‘silver’ coins.

After D day, as before, the Pound will still have the same exchange rate with the dollar (about $2.40), and with the rest of the currencies inside and outside the European Economic Community.

This does not mean that the changes have no great significance; this will only become apparent some years ahead if Britain joins the European Six and if the Six themselves succeed in setting their, at present deadlocked, negotiations about moving towards a single European currency.

The D day changes are a first step aimed at an eventual situation in which there will be only one currency covering the whole of Europe, just as the dollar covers the whole of the USA and the rouble the whole of Russia.

The 1957 Treaty of Rome which established the European Economic Community (Belgium, France, Western Germany, Italy, Luxembourg and Holland) did not itself provide for a single European currency but only for the co-ordination of financial policies. Since then efforts have been made towards unifying the currencies, culminating in a conference of the Six at the end of 1970 to consider a report drawn up by a committee under the chairmanship of the Prime Minister of Luxembourg (The Werner Report). The conference ended in disagreement but the negotiations will go on.

The Werner Report aimed at achieving a unified currency in 1980, to be preceded by an immediate agreement to re-direct to narrow limits the freedom of the six governments to change the exchange rates of their currencies. The breakdown of the conference took place over seemingly unimportant differences of opinion about the speed of progress to unification (the French government wanted it to be regarded as “a desirable object to be achieved in the long run”); about whether agreement on currency should come before or after agreement on other economic questions; and whether a central institution should be set up to handle the currency; but behind this are deep conflicts of interest of the dominant capitalist groups in different countries.

One basic cause of disagreement concerns the nature of the EEC. It was stated as long ago as 1958 by Professor Hallstein, former West German Foreign Secretary and President of the Common Market Commission:

  We are not in business to provide tariff preferences or to establish a discriminatory club to form a larger market to make us richer, or a trading block to further our commercial interests. We are not in business at all, we are in politics.

What Hallstein meant was that the aim was the creation of a Europe governed by a European government, an aim to which the French government has all along been opposed. Its relevance to the question of a single European currency is that it is impossible to have a single currency without a central government to control it. As Samuel Brittan put it in the Financial Times (16 November 1970):

  Monetary union and a common currency imply a common Budget, political union and some form of European Government.

This is not just a disagreement about some abstract question of “National sovereignty”: underlying it is the conflict of interests between the trading position of high cost French industry. In the past ten years prices in France have been rising half as fast again as prices in Germany—enough to make many French products uncompetitive in European and world markets. The remedy was to devalue the franc by 11 per cent in 1969, equivalent to a reduction of price of that amount to foreign buyers of French goods. German exports were booming to such an extent that in the same year the German government was able to raise the exchange rate of the German mark by 9 per cent and still hold most of their markets.

The fear of French capitalists is that a centrally controlled unified European currency would be dominated by German interests with their much stronger industrial and financial resources. Even the interim scheme proposed by the Werner Report, with its restriction of changes of exchange rates to 1.2 per cent up or down, would rule out any further effective devaluation of the franc.

The position of British exporters as regards the abnormally rapid rise of costs and the need to resort to devaluation of the pound (the devaluation in 1967 was 14 per cent) is similar to that of the French. Yet the Chancellor of the Exchequer has pledged the Heath government to accept whatever currency arrangements the Six accept before the entry of Britain into the EEC. Hence the determination of the Heath government to curb the rise in prices, and cut costs of production through the campaign against “excessive” wage increases.

It remains to be seen what sort of compromise the Six will reach about immediate currency arrangements and about the date of an eventual unified currency system for Europe.

Edgar Hardcastle

Finance and Industry: Was Lenin an O. & M. Man? (1967)

The Finance and Industry column from the February 1967 issue of the Socialist Standard

Was Lenin an O. & M. Man?

The Russian governors have got themselves into the position of having to justify everything they do by what Lenin said. Thus a recent pamphlet put out by the Novosti Press Agency called Material and Moral Incentives under Socialism by Mikhail Laptin attacks “wage-levelling” with quotes from Lenin. The problem the Russian propaganda machine faces here is the vague link in many people’s minds between Socialism and equality while in Russia inequality flourishes.

The titles of some of the chapters of this pamphlet are revealing enough: Wage Levelling or Material Incentive? Improving the Wage System; Differentiation of Wages; Rate Fixing; Bonuses for the Best. But let Laptin speak for himself.

  Wage levelling is incompatible with scientific progress and the wellbeing of all members of society. Should an honest worker and an idler receive the same wages, this would frustrate personal interest in raising labour productivity. in expanding and improving social production. Wage levelling would hamper the workers’ initiative, encourage passive attitudes and adversely affect production.
  The wage-rate policy of the first years of Soviet power resulted in unwarranted restrictions on the earnings of certain workers, thus creating artificial barriers to raising labour productivity. Wage rates were brought so close that most workers had no desire to improve their skill or to do complicated or physically difficult work. On the contrary, workers sought to get a quiet job, such as factory watchman, or leave the factory altogether.
  Lenin wrote that it was necessary to study scientific achievements in analyzing mechanical motions during work, so as to eliminate superfluous and awkward movements, find the most efficient ways of doing the work and introduce the best system of control and recording of results.

If these passages show nothing else they show that the Russian employers look on their workers in the same way as our employers look on us: as lazy and greedy people who will only work when forced or enticed to. Time and motion, speed-up, Taylorism and the like have always been looked on with suspicion — and rightly — by workers. Laptin says this suspicion is not justified in Russia as the means of production there belong to the people. But if this were so, why don't Russian workers recognise it? Why do they have to be convinced of it? Why do they need “material incentives” to work for themselves? Of course the answer is that this is not so. The worker in Russia does not own the means of production; he is a wage-worker selling his labour power to live. Where labour power is a commodity its price is governed by definite economic laws. Over a hundred years ago. in an address to the International Working Men's Association (later published as Value, Price and Profit), Marx explained this on the very point we are discussing:

  . . . as the costs of producing labouring powers of different quality differ, so must differ the values of the labouring powers employed in different trades. The cry for an equality of wages rests, therefore, upon a mistake, is an insane wish never to be fulfilled. It is an offspring of that false and superficial radicalism that accepts premises and tries to evade conclusions. Upon the basis of the wages system the value of labouring power is settled like that of every other commodity; and as different kinds of labouring power have different values, or require different quantities of labour for their production, they must fetch different prices in the labour market. To clamour for equal or even equitable redistribution on the basis of the wages system is the same as to clamour for freedom on the basis of the slavery system. What you think just or equitable is out of the question. The question is: What is necessary and unavoidable with a given system of production?

Given the wages system equality of wages (or wage levelling) is impossible. The early utopian experiments of the Bolsheviks failed as the economic laws of capitalism asserted themselves. Lenin admitted that this was a retreat. His successors have made a virtue of necessity. For Laptin is not one of those Marx was getting at. He thinks that it is equality of wages that is not “just and equitable”! He likes the wages system as it is, inequalities and all!

Marx was not for equal or for unequal wages. He was against the whole wages system and ended his address with this appeal to the working class:

  Instead of the conservative motto, “A fair day's wage for a fair days work!“ they ought to inscribe on their banner the revolutionary watchword. “Abolition of the wages system!"

What is Money?

The recent White Paper on decimal currency means that by 1971 the money tokens, inherited in a simplified form from feudal times, will be replaced by tokens based on a decimal system (They’re still arguing over which). The government will merely be changing the face-values and names of the paper notes and metallic coins that circulate as money. This it can do as these values and, names are matters of convention.

It is impossible to understand the role of money tokens today without realising the origin of money as a commodity. Out of the simple exchange of commodities one commodity became money, that is, the prices of the other commodities came to be expressed in terms of this money-commodity which could be exchanged for any of them. Various things, including cattle and even human beings, have functioned as money. But the most convenient in the end have always been the precious metals silver and gold. These can express a high value with a little weight and are easily divisible. The price of other commodities was at first expressed directly as a weight of the precious metal, as with shekels in the bible. This too is the origin of the name “pound”. Later the metals were coined by being stamped with the mark of the state that issued them. From this point on exists the possibility of a divergence between the face-value and the real value of the metal. This happened both as the coin lost weight through wear and tear and through deliberate debasement by the state. So that, over the years, the names like pound, crown, florin, shilling and penny ceased to signify actual measures of weight and became the names given to certain weights of the metal in coinage as fixed by the state.

The next step in the evolution of money is the substitution in circulation of tokens for the money-commodity. First underweight coins circulated for the full-weight coins and then subsidiary metals like copper and finally almost worthless paper. This is so at present where as tokens for gold, the international money-commodity, paper notes and metallic coins circulate. In Britain the basic coin metal is copper alloyed with zinc, tin or nickel.

It would be wrong to think of money as merely a medium of exchange. The tokens can do this well enough on their own. Another function of money is that of being a standard of price. This, however, since they are almost worthless, the tokens cannot do. It is only because they are tokens for gold that they perform this function. Gold of course is by no means worthless. It is a commodity having a value of its own independent of human will. The value of gold is fixed in the same way as that of other commodities by the amount of socially-necessary labour embodied in it and exchanges with them on this basis.

To say that the paper notes and metallic coins that circulate at present are tokens for gold is not to say that there is the equivalent in gold of their face-values lying in the vaults of the Bank of England. This is not, nor need it be, so. However, the law of value can no more be defied than the law of gravity. If the face-value of the tokens is more than the amount of gold needed to circulate what commodities there are, then the tokens will come to represent a smaller amount of gold. Which means that prices will rise, or, as they say today, the “purchasing power of money” will decline. This in fact is one of the reasons for the rise in internal prices that has been going on in Britain since the beginning of the last war. The pound note of today is not equivalent to the pound note of 1947 or 1957 or even 1966.

The recent craze for gold memorial medals well shows what the money-commodity is. Until the government put a stop to it these gold metals were sold as an “investment”. Apart from speculation about a possible rise in the price of gold, capitalists know that gold can be expected to keep its value while its tokens can not. It is the same in France. Over Christmas there was heavy buying of gold. One of the reasons was a fear that the Gaullists might lose the coming election for, as one paper put it, “gold remains the traditional hedge against political uncertainty in this country”. If they have to hold their wealth idle as money capitalists prefer the real stuff.

Adam Buick

50 Years Ago: Decimal Coinage (1968)

The 50 Years Ago column from the June 1968 issue of the Socialist Standard

This little volume (Sterling Decimal Coinage. By Walter L. Craig. London. Effingham and Wilson 2/6) is an exhaustive enquiry into the matter of the adoption of a decimal coinage for the British Empire. The author’s reasoning is very cogent, and he incidentally shows how vested interests and official muddle-headedness and red tape stand in the way even of the capitalists doing the best for themselves.

Not that we are concerned about a decimal system of coinage. Its obvious efficiency as a labour-saver may be admitted, but is hardly likely to appeal to the unemployed clerk in the post-war days. Also, we are expecting to establish Socialism before Mr. Craig gets even a good start with his scheme to revolutionise the coinage, and under Socialism . . .  we shall have no use for either MILS or L.S.D. There will be neither giving or receiving of change, nor weeping and wailing and gnashing of teeth over the too late discovery of a bad ’un. And if, as Mr. Craig says, the ha’penny has killed the farthing—poor mite! — Socialism will kill the damned lot.

From the Socialist Standard, June 1918.