Cooking the Books: Economic leverage (2026)

The Cooking The Books column from the July 2026 issue of the Socialist Standard

‘Workers face worst squeeze on real pay since 2022’ was the headline of an article in the Times (20 May) by its Economics Editor Mehreen Khan. In the first three months of this year, average weekly earnings increased by 3.4 percent, which was more or less the same as the rise in the Consumer Prices Index. ‘However’, Khan writes,

‘while real incomes are on course to flatline this year, the jump in global oil prices is expected to push annual inflation close to 4 per cent in the coming months’.

If average earnings go up by 3.4 percent and consumer prices go up by 4 percent, that’s a reduction in real pay for workers. So why don’t they simply go on strike and push up wages to keep up?

The answer is that workers don’t have the power to put up the price of what they have for sale — their labour power — just because they want to, even to cover a rise in the cost of what they need to produce what they are selling. They, like all other sellers, can only charge ‘what the market will bear’. And, as Khan and the economists she quotes note, the current state of the labour market will not allow an increase:

‘Rising prices, combined with a weakening job market — where unemployment has risen to 5 per cent — means workers are losing their bargaining power to demand pay rises, economists said.’

One of the economists, Josie Anderson of the financial services group Namura, used the term ‘soft labour market’. This doesn’t mean what you might expect — surely, the current labour market is a ‘hard’ one as far as workers are concerned? — until you realise she was writing from the employers’ point of view as buyers of labour power. An AI definition of the term (cobbled together from other definitions) makes this clear:

‘A soft labor market (also called a “cooling” or “loose” labour market) is an economic environment where the supply of available workers outpaces the demand for labour. In this climate, hiring slows down, job seekers face stiffer competition, and employers regain negotiating leverage.’

Whether or by how much real pay goes up or down is a question of the respective bargaining strength of employers and workers, which in turn depends on the state of the labour market, but that is not something we are usually told by the media. Normally the story is of greedy workers causing inflation by forcing employers to agree to excessive wage demands.

Sometimes workers are in a favourable bargaining position and can maintain or push up real pay: when business is booming, finding a job is easy, and employers are making good profits; this ‘hard’ labour market for employers gives workers some ‘negotiating leverage’. That is the time to strike or threaten to strike. But the reverse of this is a ‘soft’ labour market for employers; it is they who are then in a stronger bargaining position, as at present and, according to one of the economists, for the fourth time ‘in less than two decades’.

We are talking here just about changes in bargaining leverage over the shortish-time price of labour power. Ultimately, over wages, the capitalist class have the upper hand as they monopolise productive resources. This gives them leverage to force workers to sell their labour-power for a wage in the first place. There is no bargaining about this; it’s just a fact of capitalist life that is imposed on workers. The way out for them is political not economic: to take political action to make the means of life commonly owned and democratically controlled by the whole community. Then there will be no labour market and no wages system.

Civil Servants and Bonus Cuts. (1931)

From the May 1931 issue of the Socialist Standard

During and after the recent Great War, Civil Servants found that the wages and salaries paid to them as employees of the State were not, owing to the general rise in prices, sufficient to maintain them and their families in the same comfort they had been accustomed to. After much agitation and negotiations with the authorities, an agreement was entered into in 1920, by which an addition was made to the prewar scales of pay according to the increased cost of living then existing. The bonus was to be increased or reduced as the cost of living should further rise or fall.

At the present time the cost of living is computed to be 52 per cent. over that of 1914.

Under the agreement the full bonus is only given on rates of par not greater than 35s. per week. Rates in excess of that sum carry a bonus which is reduced proportionately as pay advances above 35s., so that, in these cases, the actual addition to pre-war rates varies from 46 per cent. to 16 per cent. on the higher scales of pay.

Civil Servants in receipt of basic pay exceeding 35s. weekly, and consequently diminishing bonus, therefore claim, not unreasonably, that their standard of living has been considerably lowered.

Considerable notice has been given in the daily press to the question and to the efforts of Civil Servants and of W. J. Brown, Labour M.P. for West Wolverhampton, to bring pressure to bear on the Government to suspend the operation of the agreement in reducing pay at the present time, but without success. A saving of three million pounds per annum, in the wages of Civil Servants is indicated.

Civil Servants have been pleased by the quite unusual notice of the press given to their demands, which had not hitherto been so prominently brought before the public. It is probable that this is not so much due to sympathy with the efforts put forth, as to the impression desired to be made on other sections of the workers whose pay is at present the object of attack by the master class, such as school teachers, bank employees, and others.

The facts of the situation should be closely considered by Civil Servants. On the whole, as is also the case with school teachers and similar employees, they are reluctant to identify themselves with the working class, regarding; themselves as superior and holding themselves aloof as forming part of a middle class. The fiction of a middle class is encouraged by the capitalist class in order that this aloofness may keep them politically separate from the working class. The very fact that the current discontent in their ranks is based upon the inadequate remuneration given to them in return for the work performed, is plain proof that they are dependent upon their earnings for their maintenance. This condition of society is essentially one that puts its seal upon the working class who, having no means of living of their own, must sell their labour power to an employer in order to obtain the means of living, the employer in this instance being the State.

The remuneration they receive is based upon the necessary cost of their maintenance as Civil Servants and the rearing of a family in like circumstances. Under the present capitalist system of society there is always a tendency to depress their standard of living to a minimum. This it is from which they are now suffering. As in outside working class ranks they have been compelled to form their unions in order to maintain and forward their interests, as opposed to the attempts of their employer, the State, to lower their status and standard of living.

What is here pointed out should help Civil Servants to realise their position in Society, and also that, in order to reap the full benefit of their labour, they should unite with ail other sections of the working-class to overthrow the capitalism system and to establish the Socialist Commonwealth.

F. J. H.

The Bakers’ Agitation. (1907)

From the July 1907 issue of the Socialist Standard

Why the Manchester strike must fail.

There is probably no “skilled” section of the working class in a more hopeless plight than the Operative Bakers. All the forces of bestialization seem to be focussed upon that unhappy craft. Withdrawn from all social intercourse with his fellows, and from home life, by the continuous nightwork system, beginning his week’s work early on Sunday evening (I have heard men sworn at for not being in soon enough to allow the boss and his family to be in time for Chapel), sweating far into the next day, he comes home exhausted, takes a fitful and feverish sleep, and repeats the process daily until Friday, when he must start several hours earlier and work several hours later in order to make bread in one night for two days. The work is not only physically exhausting, but the nervous strain is great. He sees the dough in warm weather “moving” faster than he can cope with it to keep it sweet. If the temperature suddenly falls during the night, or (as is often the case in these days of faked ingredients) the yeast deteriorates, it is “on the green side,” and he goes in fear of a “slamming” if the vans have to wait, or if the loaf has to weigh two pounds to be big enough for sale.

In the factories the hours are usually shorter, but the nervous strain is even greater. The speed is much faster and the work oftimes more laborious. The operative’s job is much less secure, at he can be discharged without notice. The wages in both cases work out at less per hour than that of the general labourer, the trade union rate, which few receive, being only 28s. per week of 60 hours for table hands. He therefore does not receive the means of subsistence for himself, a wife and family. Under such inhuman conditions it is certain that the spirit of revolt would be engendered in all those not sunk in the torpor of despair, but alas ! the operative baker’s spirit of revolt does not take definite shape. He has no money to buy books, no opportunity to confer with his.fellows ; the mental atrophy resulting from many hours of night labour in the hot, fetid atmosphere of the bakery (I have worked in an atmosphere of over 100 degrees Fah.) make him the sport of those execrable creatures, the palate-tickling, self-seeking Labour leaders.

The baker’s spirit of revolt is manifesting itself at the present time in Manchester, and there are threats of a strike unless certain demands preferred by the operatives are conceded. Let us see what a strike in the baking industry means, and why it must entail, not only the suffering incidental to every strike, but also starvation for the women and children and bitter disappointment for the operatives.

In the first place I will briefly recall the London ’89 strike as it is called, the last great strike in our industry, and which our “leaders” claimed as the most successful strike since the amalgamation of the small unions. After a long agitation the London men finally decided to come out, a manifesto was sent to the masters and copies posted on the hoardings ; and on a given date all the men handed in a copy of the union’s terms for the signature of their respective employers. If these terms were not accepted the men gave a week’s notice. Many employers gave in, and the result was that these engaged a few extra men and supplied those masters who stood out with bread for their customers in cases where a sufficiency of blacklegs could not immediately be obtained. We thus had the edifying spectacle of union men blacklegging their striking brethren. London did not lose a single day’s bread supply. The displaced operatives received strike pay for some weeks, and paraded the streets carrying “peels” draped with crepe, headed by a brass baud which played the Dead March and other sloppy sentimental drivel outside the non-union shops until the funds were exhausted, mainly through the refusal of those in work to pay strike levies, and dropping out of the union.

Meanwhile the masters were active. They immediately substituted quick-working distillers’ yeast for the old fashioned bread-sweetening but, slow-working “thick” and “compo” yeasts; the “straight” dough system was adopted in lieu of the ferment and sponge system. More machinery was introduced, factories sprang up, or were enlarged, the unemployed grew larger, with the inevitable result of longer hours and less pay for those employed. And in less than a year conditions were even worse than before, excepting in a few instances, mostly factories.

I myself, rather than submit to the conditions my pious employer tried to enforce, threw up my job and walked about for weeks looking for work, spent the accumulations of my thrift in advertising, and was finally glad to accept a job at 22s. and bed per week of upwards of 90 hours. My bed was a fifth share of a room over the flour loft, in which we cooked and smoked. One corner of the room was the office of a city gent rejoicing in the name Pierpoint & Co., and there were other occupants of the room whom we did not individualize, but referred to by the generic name of “mahogany backs.” This was six months after our “successful” strike in that year of successful strikes, 1889.

Shortly after this there occurred an incident which revealed two facts to the alert capitalist. In North London a master baker and publican was a member of the local vestry, and in his capacity as guardian of the public health, led the opposition to a builders’ sundriesman constructing lavatories in the basements of some buildings he was erecting. The sundriesman tried various ways to bring our baker “to his senses,” without avail. He then played his trump card and threatened to ruin the baker, and this is how he proceeded. He took a shut-up shop in close proximity to the baker’s, went to a local factory owner and arranged to have an unlimited supply of bread, engaged a cashier and countermen, fitted up the shop and opened it for the sale of bread at a penny per quartern lower than the lowest cutter in that “bread-eating neighbourhood.” People came from all the surrounding districts with flour bags, baskets, etc., to fetch bread for themselves and friends, policemen were stationed at the shop door to regulate the crowd, who filed in, made their purchases, and went out through the back entrance. The bakers in the factory were working at breakneck speed, at piece wages, their wrists swollen and bandaged with excessive moulding. The baker vestryman was “brought to his senses,” and many others were driven out of theirs and compelled to call a meeting of their creditors, while the factory-owner and the builder made a profit. Less than a year ago the victor, who now lives in affluence, told me he did well over the “deal.” This incident revealed to the factory-owner the number of sacks of flour that could be turned into bread per man in a week. The speed was maintained, but wages reverted to the normal night wages. The more alert capitalist was quick to see the possibilities of machinery, and that a practically unlimited supply of bread could be turned out with its aid and that of a few skilled bakers, and by drawing on the ever increasing army of “unskilled” labourers. He saw the economic advantage he thus obtained, and that the possibility of a successful strike of London bakers was gone for ever. Indeed, the improvement and development of machinery in the baking industry has proceeded at such a pace that it is well known by live bakers that a very large proportion of the work now done in bakeries could be done by unskilled labour, which would be immediately introduced should the operatives force up their wages by any means.

And in the event of a strike the general foremen with one or two blacklegs to supervise the weighing of yeast and salt, the temperating tank, the pitching of flour, etc., and with the assistance of engineers, supplied by the engineering firms, to superintend and work the dough mixers, dividing and moulding machines, regulate the heat of the ovens and draw the plate, could turn out all the bread that was required. Unskilled labour could easily do the rest. The result would not perhaps be the highly finished commercial loaf of to-day, but bread equal in quality to that at present sold. In no trade has technical knowledge been rendered valueless so quickly as in that of bread making, and the factories are fast scooping the trade. Everything is working in their favour, and a rise in wages, shortening of the hours of labour, the abolition of night work, or any other possible reform would give the factory a further economic advantage over the handicraft bakery and the operative.

In 1889 the masters were not organised as they are now. Every district has its local association, while 90 per cent. of the bakers in urban districts are in the National Association. It will be an easy matter then to get the output of the 700 striking operatives in Manchester made in the various factories and conveyed to Manchester in a little over four hours, even from London. Sectional strikes are hopeless in all trades, but in the case of the bakers are madness. There is no hope for us under the capitalist system of production. We must trust to ourselves alone, cease to look up to leaders or appeal to politicians, organise ourselves politically and industrially, not in vain attempts to palliate or relieve our conditions, but to end them.

That trade union leaders do not understand the working-class position and are not to be trusted is evidenced by their public utterances, their miserable failure in the House of Commons, the insipid twaddle with which they decorate the title pages of rule books (“Defence, not Defiance,” “For the Good of All,” etc.), their dining and wining with, and cringing sycophancy in the presence of, the enemy’s lenders. That they do not understand the position is the most charitable construction that can be put upon their conduct. If they understand, acting as they do, they must be frauds. On the other hand the capitalist does understand the economic position, does recognise the incessant class war being waged, does fight scientifically, with all the logic of brutal warfare. He gives no quarter and allows no scruples, no appeals to his humanity to thwart him in his one object and ethic, the complete domination of the working class, the securing to himself an ever increasing share of the wealth produced by our labour. I therefore appeal to the Manchester men before engaging in a suicidal sectional strike, to reconsider their position and what a defeat must mean to them, what a long fight must mean to their wives and children. Even supposing a long fight were possible, is the objective worth the struggle ? While capitalism lasts the capitalist must come out on top. Our emancipation can only come by the complete overthrow of the system of production for profit, and the establishment of the Co-operative Commonwealth.

W. Watts

Breaking Apart (2024)

Book Review from the June 2024 issue of the Socialist Standard

Shattered Nation: Inequality and the Geography of a Failing State. By Danny Dorling. Verso £14.99.

It was recently reported (BBC online 21 March) that the UK now has twelve million people living in absolute poverty, after the biggest rise in thirty years. And in December the Centre for Social Justice (centreforsocialjustice.org.uk) published Two Nations, a report which concluded that for those who are not getting by, ‘their lives are marked by generations of family breakdown, their communities are torn apart by addictions and crime, they live in poor quality, expensive, and insecure housing, and they are sick.’ Here Danny Dorling, who has written on similar issues in the past, surveys many of the ways in which the lives of British workers are indeed being shattered.

One theme is that in most of the world, human lives are improving, but not so much in the UK. For instance, infant mortality is falling faster elsewhere than in the UK, and economic inequality is falling. The UK is probably the most unequal country in Europe in terms of income inequality. In the late 1960s and early 70s, Britain was more equal than it is now, and where you grew up was less important than it is today.

The second part of the book echoes the Five Giants identified in the 1942 Beveridge Report. They are presented as hunger, precarity (insecurity related to housing as well as employment), waste (with far more people now working in finance and accounting), exploitation (such as high university fees), and fear (physical and mental health having declined since the 70s). Research in 2022 showed that one UK household in six was in serious financial difficulty. Austerity has led to a slowdown in growth in life expectancy in Britain, and people in the poorest fifth of households saw their earnings fall between February and May 2020. Death rates from Covid were higher in the poorest areas, and long Covid is most commonly found there too. Many facts and statistics such as these make much of the book an informative but rather depressing read. There is one refreshing observation, though: ‘We should measure the value of a job by the amount of happiness it brings to others, not by the profit that can be made by the person employing the worker.’

And what is the author’s proposed solution? This is not a book where the last chapter offers a raft of reformist measures intended to do away with the problems discussed earlier. Rather, the proposals are spread throughout its pages, including minimising VAT, raising wages faster than food price increases, making school lunches universally available, making tenancy agreements more secure, and restricting second-home ownership. It is ironic that the Labour Party is criticised for proposing ‘only more tinkering’, when the ideas set out here are little more than that.

What we said in the April 2015 Socialist Standard is just as valid as it was then: Danny Dorling should be a socialist and not simply fight for reforms.

Paul Bennett

Editorial: The Labour Party’s Thirty-One Years. (1931)

Editorial from the March 1931 issue of the Socialist Standard

Workers Worse Off

The Labour Party was formally constituted under its present title in February, 1906, after the General Election at which twenty-nine Labour M.P.’s were returned. Six years earlier the Labour Party’s predecessor, the Labour Representation Committee, was formed. The Independent Labour Party, which was largely instrumental in bringing about the later developments, was formed in 1893—nearly forty years ago.

All three bodies were based on the same general set of ideas. They rejected the possibility of winning over the workers to Socialism by the direct method of preaching clear-cut Socialist principles, and based their hopes on the policy of winning support by the indirect method of social reforms. They argued, not without some show of reason, that the workers were interested in day-to-day issues containing the promise of immediate advantage, and were not interested in the broad question of the organisation of society. Those who retorted that the job must be tackled of changing the workers’ outlook were pushed aside. They were told that practical work would prove far more effective than mere criticism of capitalism and preaching of Socialism. The Socialist Party of Great Britain was a voice crying in the wilderness. Our warning that capitalism would frustrate all the practical work as fast or faster than it could be achieved, and still leave Socialism unattained, was ignored or derided. Now that thirty-one years have passed and the Labour Party has twice been in office, it is opportune to look back and judge of the truth of our criticism. How have the facts treated the Labour Party’s theory?

Are the workers better off? Have they improved their position relatively to that of the capitalist class? Is life more leisurely for them and more secure? Have extremes of wealth and poverty been abolished? And, a last question, are we nearer to Socialism?

Speaking broadly, all of these questions must be answered in the negative. We have had reforms innumerable; Liberal reforms backed by the Labour Party; Tory reforms; and Labour reforms backed by Liberals. The political wheel has gone full circle. A Labour Party once subordinate to the Liberals has won to power, and now it is Mr. Lloyd George who must go each week to 10, Downing Street, for consultations on the joint Liberal-Labour policy.

But the enactment of reforms has been like pouring water into a leaky bucket, Nearly every additional expenditure by the Government on social reforms to remedy some pressing working-class evil has helped to lower the workers’ cost of living. What the workers have received in the shape of sick benefit, unemployed pay, etc., has been used by the employers as an excuse—admitted or unadmitted—for seeking to reduce wages. What has been gained at great effort in one direction has been wholly or partly taken away in another. As the Liberal economist, Professor Clay, admits in his book, “The Problem of Industrial Relations,” the increase in expenditure on social services has not been a clear addition to wages, but “has followed and to a large extent compensated for, the check to the rise in real wages . . . about the end of last century” (p. 249).

Up to about 1897 the purchasing power of the workers’ wages was rising. Since that date real wages have fallen. Against social services, therefore, must be set the decline in real wages and the increase in unemployment. Professor Clay admits that from 1895 to 1913 prices were rising more rapidly than wage rates, in spite of “a rapid increase in the country’s wealth” (ibid., p. 212).

Professor Pigou, writing in the Economic Journal for June, 1923, said : —

“The rate of real wages actually declined between the later ‘nineties and the outbreak of the Great War.”

The Labour Research Department (this is not a Labour Party organisation) made an attempt to compare real wages in the years from 1900 to 1928.

Their estimate was based on official figures, and allowed for unemployment and for changes in the cost of living. It showed that in 1928 the industrial workers were about 6 per cent. worse off than in 1900 and about 5 per cent. worse off than in 1914. (See L.R.D. Bulletin, January, 1929.)

The Labour Party’s own Research Department made a similar inquiry (see Labour Bulletin, June, 1929). They found that real wages, after allowing for changes in prices and in the amount of unemployment, were in 1928 practically the same as in 1914, but slightly less (1.6 per cent.) than in 1900. Since 1928, according to recent issues of the Labour Bulletin, real wages have fallen 3 per cent. or 4 per cent. They have continued to fall since the Labour Government came into office.

We do not claim for any of the estimates quoted above that they are more than approximate. The subject does not permit of absolute precision. They are sufficient, however, to indicate the trend of wages.

What we emphatically must say is that nothing has been achieved by the reform parties in the past thirty or forty years in any way commensurate with the vast expenditure of energy by two generations of enthusiastic supporters of the Labour Party. We do not believe that those who joined the Labour Party would have toiled for 31 years if they had realised then what small and uncertain results would come from their efforts. Would they have been so confident of the soundness of their policy if they could have foreseen that after all their labours the proportion of the national income received by the wage-earners would fall from 47.4 per cent. before the war to 45 per cent. to-day? That is the admission of the Daily Herald in its editorial on February 13th.

And none of the hardly won reforms are certain gains. A period of acute unemployment like the present, accompanied by wage reductions, may in a few months wipe out the savings of a lifetime and destroy the wage standards defended by years of effort. Then, in the midst of the hard struggle of the workers, Mr. Philip Snowden, Chancellor of the Exchequer, announces that we must all be prepared for sacrifices: “The sacrifice the workers might have to make would be a temporary suspension in schemes of social development.” (Report in Daily Herald, February 18th.)

The Labour Party believed in reforming capitalism, but finds when in power that those very capitalist evils which the reforms were to solve, themselves make further reforms impossible at the very time when the evils are greatest. What a fate for a thirty-years-old movement ! !

We prophesy that the Party which rose to power by exploiting the discontent arising from the effects of capitalism, and which undertook to deal with those effects, will be hoist with its own petard. Discontent made the Party. Sooner or later discontent will break it. Already Mosley and others have broken away.

The Socialist policy of tackling the cause of working class poverty, and abolishing the capitalist system of society, was unassailable in 1900 and is still the only way out for the working class.

Editorial: The Uselessness of Reforms. (1930)

Editorial from the April 1930 issue of the Socialist Standard

An Important Admission.

Those who oppose Socialism and urge a policy of getting “something now” in the shape of social reforms habitually ignore the strength of the pressure which the employing class are able to bring to bear to force down wages towards the minimum consistent with efficiency.

What is the value to the workers of giving them unemployment pay if the “gift” is accompanied by a reduction in wages? The existence of a large and increasing army of unemployed puts the employers always in the position of being able to secure such readjustments.

In a report on wages in the wool textile industry, Lord MacMillan, appointed by the Labour Government to preside over a court of inquiry, recommends a wage reduction. He uses as one of his justifications for reducing pay the fact that social services have lessened the demands on the workers’ wages. In effect the “gains” secured by the vast efforts of the Labour Party and its supporters over many years are being nullified by reductions in wages. The reforms reduce the workers’ cost of living, but the employers it is who reap the benefit.

Lord MacMillan’s actual words are as follows (quoted in The Times, March 7th) :—

“In  former times  the  prudent  workman  had  to make provision out of his wages for various eventualities, the risk of which is now covered by one or other of what are known as the “social services”. . . . Thus the workman is now insured against ill-health, unemployment, accident, old age, and blindness, and provision is also made for his widows and orphans. In addition money from public sources is provided in connection with the health of mothers and children and the prevention and treatment of disease, as well as for the relief of the destitute and the care of the physically or mentally infirm. … I think it relevant to point out that they play a substantial part in improving the standard of life of the workman and lightening the burden on his wages.”

Another half-brick.

The “step-at-a-time” politicians of the I.L.P. and the Labour Party are for ever defending themselves on the plea that “half-a-loaf is better than no bread.” The first half-brick which the Labour Government delivered was a 6¼  per cent. reduction in pay for the cotton workers. Now comes a recommendation for a reduction for wool workers, ranging from 3s. to 5s. a week. (Daily Herald, March 8th.) The Herald in an editorial describes this as “a victory from the employer’s point of view.”

We would like to ask in what way “a victory from the employer’s point of view,” ushered in by MacDonald and his party, differs from a similar victory engineered by Baldwin.

And in view of the fact that a majority of the Labour M.P.s are members of the I.L.P. will Mr. Maxton tell us how many half-bricks make one “Socialism in our Time”?

The Bankruptcy of Liberalism. (1931)

Book Review from the February 1931 issue of the Socialist Standard

A Liberal Economist on the Problems of Capitalism

In his book, “The Problem of Industrial Relations” (MacMillan & Co., 1929), Professor Clay maintains that the “problem of industrial relations” is how to secure harmonious relations between worker and employer, how to find “an adjustment of the interests of employers and employed, that will secure the co-operation of both in the work of production” (page 3). The present order of society riven into two conflicting classes, the owners of the means of living-and the non-owners, he accepts without question. He admits that industrial unrest arises from the conflict of interests between employer and employed, and he is concerned with reducing to a minimum the economic friction between these two classes.

His main thesis is that inequality of wage rates, intensified during the war period, as between one trade or industry and another, is largely responsible for industrial disputes, and that attention should therefore be directed towards “the equalisation of bargaining strength among all sections of wage-earners,” either by the lower-paid workers themselves organising in Trade Unions, or by Government regulations to prevent sweating, so that all sections of the working class can obtain a “fair wage.” He devotes several chapters to a discussion of the spread of Trade Unionism during the War, and the growth of arbitration and conciliation methods—Trade Boards, Whitley Councils, Joint Industrial Councils, Works Committees, Industrial Courts of Arbitration, and so forth—means of negotiation which enable a trial of strength between organised employers and employees to be made, or, as Clay says, “interpret the interplay of economic and social forces” (p. 231) and so enable wage disputes to be settled without strike or lock-out to interrupt the flow of profits to the capitalist.

To the Socialist, however, the problem is not one of ensuring that the lion and the lamb shall lie down together, but of waking the working class up to understand the economic and social forces which make them wage-slaves. So long as the means of wealth production and distribution are privately owned by the capitalist class, so long will the labour power of the propertyless worker be a commodity which he must sell for the best price he can get according to the fluctuations of supply and demand. Whether at any particular moment he gets “fair” wages or foul, the fierce competition arising from ever-present unemployment prevents wages in the long run from exceeding the cost of living a shoddy life. As stated in one of the reports of the Whitley Committee on the machinery of industrial conciliation, which Clay quotes, “. . . such machinery cannot be expected to furnish a settlement for the more serious conflicts of interest involved in the working of an economic system primarily governed and directed by motives of private profit” (p. 150). The remedy for this problem is for society to own the means of production, and to produce for use.

At some length, Professor Clay tries to show that “wage rates and unemployment are correlatives; if a wage rate is too high, it will cause unemployment” (p. 245), and that “it is no kindness to fix wage rates above the level set by an industry’s capacity to pay wages and still employ its labour” (p. 192). He holds that “normal” unemployment is mainly due to the wrong distribution of labour force; and the present abnormal unemployment he attributes to the War, which enhanced the maldistribution of labour force and removed a part of England’s markets. He therefore advocates that wages should, in some cases, be lowered, so that lost markets may be recovered from foreign competitors.

The old story of more work and less wages to recapture lost markets! The standard of living in Germany is a little lower than in England, and there are 3,000,000 German workers unemployed ; the standard of living in America is a little higher than in England, and the number of unemployed American workers has been estimated at about 7,000,000. Unemployment is increasing in Holland, Belgium, France, Italy, and elsewhere. In all these countries the employers’ journalistic and academic servants are urging the workers to work harder for lower wages, in a world glutted with products which cannot find buyers, whilst in many branches of production desperate efforts are being made to restrict output !

Unemployment is an inevitable feature of capitalism, and its tendency is to increase. Dealing with American unemployment, The Times (August 8th, 1930) says:

“It is beginning to be realised at long last that even if a recovery in business on a scale no longer thought probable should occur, it would not go very far to solve the unemployment problem. Throughout the years of fabulous prosperity that preceded the crash of last autumn unemployment was steadily increasing. The same processes of technological change, including the rapid substitution of capital for labour in industrial and agricultural production, were going on before the crash, are going on now, and will continue.”

Professor Clay recognises the increasing insecurity of “the propertyless worker, whether unskilled labourer, responsible organiser, or scientific expert” (p. 270), but fails to suggest the logical remedy. Only when the means of production are commonly owned and democratically controlled by the whole community will the application of science to production cease to divide the vast majority of mankind into the over-worked and the unemployed. “Meantime,” says The Times (July 29th, 1930), “rationalisation and unemployment are both increasing.”

Clay’s attempt to show that the various forms of public relief and social insurance increase the real income of the working class is really funny. First, he says that since these social services are paid for with money provided by taxation, and practically all the wage-earners fall below the income-tax exemption limit, then “the aggregate expenditure on social services is in the main an addition to the real income of the class that draws wages” (p. 2i7). He forgets that these social services, by lowering the cost of living, also tend to lower the workers’ wages in a labour market where there are always more men than jobs. Lord MacMillan, in making his report on woollen wage reductions, pointed out that social services such as pensions, insurance, etc., should be taken into consideration in fixing present-day wages. And Lord MacMillan was only stating explicitly a principle already being put into operation by the employers generally.

Clay himself gives figures showing that during the period from 1880 to 1914 real wages were falling whilst expenditure on social services was increasing; and points out that “the increase in expenditure . . . has followed, and to a large extent compensated for, the check to the rise in real wages.” Finally, he concludes that the effect of these social services “was to change the form, without altering the amount of wages. They ordained that the worker, instead of getting all his earnings in weekly wages, should get a part in the form of rights to income in sickness and unemployment, . . . (they) secured a better distribution of the wage-earner’s income, reducing it when he was working, but insuring thai it did not cease when he was unable to work. Wage-earners could have made a similar provision for themselves, as some of them did, through Friendly Societies and Trade Unions” (p. 219).

His chapters on the distribution of property are a plea for the small property-owner, and he gives many useful facts and figures with regard to the distribution of wealth in this and other countries. He shows that the total value of the properly left by 97,000 rich people who died during the year ending March, 1921, was £431,000,000. an average of nearly £4,300 per person, whilst “five-sixths of the population may be presumed to have less than £100 property each.” He asks, “How many working-class homes would have fetched more than £20, if sold up, before the War?” (p. 286). He also shows that alongside the increasing inequality of wealth has proceeded a change in its composition, contractual rights to money payments taking the place of real property, and this to an increasing extent in larger estates. A rich man’s estate consists largely of stocks and shares.

Clay describes this change in the nature of the right of property, brought about by capitalism, as the change involved in “the separation of the ownership and use of wealth,” by which property comes to consist not of a concrete thing but of a right to income. Before the days of capitalism, the simple tools of peasant and craftsman were their individual properly. To-day a railway shareholder cannot point to a single nut or smut as his own; but he holds a right to share in the profits. Clay shows from the Estate Duty returns that whereas house and business premises represent about 16 per cent., and land only about 9 per cent, of the total property, nearly 45 per cent, is in Stock Exchange securities; or, in other words, the largest element in property to-day is simply the claim to a share in the profits of industry, i.e., a legal right to live on the back of the working class. Clay is right in regarding this revolution in the form of property as being based on the change from puny individual production to mass production and distribution on a large scale by machinery too vast for individual ownership; but he is wrong in speaking of it as having resulted from “the separation of the ownership from the use and administration of capital.” The tools of the mediaeval craftsman were not capital. He makes the common error of confusing “capital” with “instruments of production,” which only became capital as a result of this separation of ownership from operation, by which the capitalist class, owning the means of production, can live on the wealth produced by the propertyless working class, who alone organise and operate the whole vast and complex mechanism of production and distribution.

The Professor is distressed at “the inequality of incomes, which is a chief cause of social unrest and the chief cause of waste in the modern economic system”; but he desires “the maintenance of the present right of property.” He wants property more evenly distributed, so as to check the growing inequality of wealth which threatens to engulf the small property owner and crush his “personal independence” (p. 207). He wishes to alleviate effects without abolishing fundamental causes. He wishes especially to remove those effects which injure the “middle class,” by means of some scheme of taxation “to enforce a continual re-distribution of property” for “the creation of a large independent class of small owners.” He regrets that “it would hardly be possible to frame a (scheme) . . . that would reach any large proportion of the propertyless proletariat ; but it would be easy to frame a scheme that would do something to restore the fortunes of the non-commercial, small-propertied middle class, on whom, since the aristocracy was superseded by a plutocracy, the maintenance of the finer arts of life mainly depends” (p. 313).

Thus, “economic inequality remains to be redressed,” but “no revolutionary change … is needed” (p. 317). For the wolf shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little (professorial) child shall lead them.

In his last chapter. Clay defends the Liberal Party, a Liberal Party which stands for Free Trade and freedom of enterprise, as the only alternative to “a Conservative Party that is protectionist in principle, and a Labour Party that is socialist in principle.” He advocates “freedom of private enterprise” as contrasted with the State monopoly of industry (which he imagines is Socialism); “freedom of international trade as a safeguard of international peace” ; and “a wider diffusion of property” to correct the growing inequality of wealth.

Apart from the absurd suggestion that the Labour Party is Socialist (their only service to the Socialist movement is their refusal to allow official Labour candidates to label themselves Socialist), it is very clear that Clay confuses Socialism with Nationalisation. He says: “None of the numerous varieties of Socialism could have any effect except still further to concentrate authority and subject the workers to a more detailed and complete subordination. All alike involve the establishment of legal monopolies, and are based on the subordination of the economic organisation to the State. The extinction of free enterprise by the competition and legalisation of monopoly would result in a bureaucratic inequality as oppressive as, and more difficult to control than, the present inequality” (p. 311). This is true enough if the word “Nationalisation” is substituted for “Socialism.” The nationalisation of an industry means that it is controlled, not by individual capitalists, but by the capitalist class as a whole through the Government, which is its “board of directors.” Thus Clay, thinking he is discrediting Socialism, only condemns the latest and most complete form of capitalist organisation.

He has to recognise, however, that “the extension of the State’s economic activities is necessary and will continue” although he desires “to keep the political and the economic organisation of society distinct” and “to develop international trade as a safeguard of international peace” (p. 306) ; for, he says, “we are members of an economic community . . . the boundaries of which do not coincide with those of any State.” He falls to grasp that the political division of the world into antagonistic States, when all its parts are economically dependent one upon another, is the political reflection of the contradiction inherent in capitalism; the contradiction of the social use and operation of the tools of production by the working class of the world, alongside the private ownership of these tools by competing groups of capitalists in the Great and Minor Powers.

This contradiction between social production and private ownership is the rock upon which capitalism splits. It has been the historical function of the capitalist class to bring about social production, with its enormous possibilities for human comfort and culture; it is the historical function of the working class to bring social ownership and control into line with social operation, and make these possibilities a glorious reality.

Frank Evans

Facts for Socialists. (1907)

From the June 1907 issue of the Socialist Standard

The contention of the Socialist that the whole working class is sweated is amply proved by the evidence of even our opponents. The National Anti-Sweating League, organised in a vain attempt to deal solely with the worst effects of capitalism, provides in its “Report of the Guildhall Conference on a Minimum Wage,” information from which may be deduced not alone the futility of the League’s attempt to destroy effects without removing the cause, but also the fact that the description given by the Socialist of the position of the working class is not in the slightest exaggerated.

Mr. Stephen Walsh, M.P., in the course of a paper on “Present Steps towards a Minimum Wage”, said:

“The average wage paid by the employer in 1888 was 5s. a day for the collier in the Federation area. Even in the great lock-out in 1893, when the colliers’ earnings had been uplifted by 40 per cent., the collier could not be earning more than 7s. a day. That might be considered to be a big figure compared with other unskilled trades. But the trade was of a very fluctuating character. It must be remembered that the men were not working more than nine days in the fortnight—in the Midlands, pits were not worked more than three or four days a week. That means that the average wage of the coal hewer comes out at about 28s. a week—a figure borne out by statistics of the money paid in compensation claims. That is the very best class of workman.

“It was in 1894 that a Conciliation Board was formed consisting of twelve representatives from each side, with an independent chairman, who was called upon in the event of disagreement. In 1893 the employers asked for 25 per cent. reduction, and it will be remembered what a terrible lock-out ensued, causing suffering not only to the men but to the public. In 1894 the Conciliation Board was formed, and the men assented to a 10 per cent. reduction. In 1894-96 the Board continued. It lapsed for two years, was revived in 1898, and has since been renewed at periods of three years.

“Although the men have this means of defending themselves, they are still earning, roughly, about 28s. a week. Women and boys are very largely outside the union. The girls working on the surface are also not in the union. In fact, it may be said that something like 80 per cent. of the surface hands are not in any organisation, with the consequence that in negotiations with the employers the men are constantly told that these people must be excluded from consideration. The growing youth cannot have his wages determined by the Board, but they are fixed by the employer’s estimate of his usefulness.

“Girl labour on the surface has existed for more than 30 years, and Lancashire especially suffers from it. A few pits in the south-west district and a large number in Scotland also employ girl labour. Thirty years ago girls were paid anything from 1s. 4d. to 2s. 6d. on the pit banks, and they were working, certainly, not longer hours than at present—even shorter hours in Lancashire. The chances are that a woman will now earn from 1s, 3d. to 2s., 1s. 8d. being about the average. As the working hours are about nine and a half per day the wage cornea out very little better than 2d. an hour. It might be said that the work did not require much skill or physical energy. Cleaning the dross is not heavy work, and pushing the waggons has been done away with. But many of the women are exposed to the inclemency of the weather. The fact remains, too, that these girls are earning less than they did 30 years ago, and have to depend partly for a living upon the earnings of fathers and brothers in the mine. In no case, if we take Lancashire, are the women working, even in good years, more than nine days a fortnight; and a wage of 6s. 9d. a week, with a reduction for the club of which she is a member, is utterly insufficient for a woman’s subsistence wage. Twenty-eight shillings a week paid to a collier are practically wages paid to him and his girls, so that their combined wages may eke out a family living.

“Whereas twenty years ago day wage men were earning 4s. to 5s. a day we find that to-day little more than 40 per cent. is suggested to have been placed on their wages.

“I can only say that this apparent improvement in the men’s position is very illusory ; the generosity of the employer has not been applied. As a matter of fact, when the increased hours of work and the higher price of fuel, household commodities and house rent are considered, the day hands in the mine are in a worse condition than they were eighteen years ago.

“Although one of the most powerful of the trade organisations has been endeavouring to establish a minimum wage for the coal mining industry in the federated area, it has so far not succeeded in doing so. An attempt has been made to abolish the piece rate but there is the risk of inviting competition and bringing in the unemployed compelled by physical necessity. It has been generally found that if a man leaves work in a mine the man who takes his place earns sixpence a day or so lower than the wages his predecessor received. Again, the mining tonnage rate is no indication of the earning capacity of a man. The diversities are so infinite that it is impossible to say what a man can earn on a particular tonnage rate, and so the decision is left to the caprice of the official in the mine.

“We have, however, established over large areas not the mere field rate but price lists and working conditions that have focussed and crystallised payment for varying conditions in the mines. But there is a large section of the mines in which this particular work has not been done.

“Nevertheless, 18 years of continuous effort has failed to delete the present wages system, failed to establish a minimum wage. I can only ask the Conference to consider if a great organisation numbering well over three hundred thousand workers has failed to do this what must be the task of establishing a minimum wage in an industrial body which is hardly organised at all.”

Mr. L. G. Chiozza Money, M.P., in dealing with “Sweating in relation to the National Dividend” said :

“The existence of an enormous number of poor people in what is reputed to be a wealthy country is vaguely known and as vaguely wondered at. It should be the endeavour of everyone who is interested in any one or all of the many phases of poverty to acquaint himself specifically with the best information which is available as to the actual amount of poverty which exists, and as to the facts relating to the manner of distribution of wealth which makes poverty so common. Armed with this material, those who sympathise with the sweated can show with near approximation what amount of underpayment of labour exists throughout the country as a whole, and the criminality of gross underpayment in view of the available resources of the nation.

“By the National Dividend we mean the aggregate of all the incomes, large and small, of the people of the United Kingdom. We can form an approximately correct idea of its extent by adding to the incomes of the income tax paying classes, as ascertained by the Inland Revenue authorities, an estimate of the total amount of wages and small salaries earned by those who have not the pleasure of paying income tax. I give a brief account of how I arrived at the income of the British people in 1904.

“First I take the gross assessment to income tax for 1903-4 which is nearly £903,000,000. I correct this, on the one hand, by deducting items which are not real income, such as the cost to a landlord of repairing his house, etc., and, on the other hand, for amounts of income which ought to come, but which do not come, under the attention of the authorities. These various corrections, with the details of which I do not burden this paper, reduce the £903,000,000 of gross assessment to £830,000,000, which figure represents the net income enjoyed by the income tax paying classes.

“Now that disposes of an enormous amount of income, but only of a very small number of people, for the income tax is levied upon those who are in receipt of upwards of £160 a year, so that we have not got very far in point of population. Below the income tax line we have to deal with not only the whole of what are commonly called the manual labour classes, but with those other orders of poor people who, in a very real sense, are working men, viz., small tradesmen, clerks, shopmen, travellers, canvassers, teachers, agents, small farmers, inn-keepers, lodging house keepers, civil servants, pensioners, and so forth. From a close examination of the census records I have arrived at the conclusion that there are about three millions belonging to those occupations who earn less than £3 a week. How much do they earn on the average ? I have gone over that very carefully and believe that their average earnings cannot be placed higher than £75 a year, ranging from the 8s. or 10s. a week of the office boy to the £3 a week of the superior clerk. Accepting this estimate tentatively, we get as the income of this particular part of the working population £225,000,000.

“It remains to deal with the greatest bulk of all, viz., the manual workers commonly so-called, including, in addition to all those engaged in agricultural, industrial, and domestic service, soldiers, sailors, policemen, and postmen.

“Those, using the census of 1901 as a basis, I estimate to number 15,000,000, men, women, boys, and girls, in the year 1904. Unfortunately, we have not in this country, as we ought to have, a permanent and continuous census of wages. We are very neglectful in the matter of records, and the only official census of wages which we have ever made was got out in 1886 by the Board of Trade. I have used this as a basis and allowed for the changes of wages which have taken place since that date.

“In 1886, the average wage, giving due weights to the respective proportions of men, women, and children, was only 17s. 6d. per week. In 1904, allowing for the general rise in wages in the interval, it amounted to 20s. 6d. per week. It should be borne in mind that this figure represents rates of wages and not earnings. If we want earnings we must make an allowance for idleness from whatever cause arising, whether from sickness, accident, lock-out, strike, weather, slack time, total unemployment, or drink. Allowing for these things, we cannot assume that the average wage is earned for more than 44 weeks out of 52 weeks in such a year as 1904—20s. 6d. a week for 44 weeks means £45 in the year.

“But we have to consider that not all those who figure in the census sheets as manual workers can be counted as normal workers. There is the great army of casuals, ne’er-do-wells, aged persons, men and women broken in health, and last, but not least, those employed in what are called sweated industries. I do not think that, of the 15,000,000 manual workers, we can estimate these most unfortunate of the industrial army at less than one-fifteenth of the whole, or say, 1,000,000 persons. The earnings of these 1,000,000 persons I estimate at £25,000,000 per annum, or an average of about 10s. per week per person.

“The remaining 14,000,000 manual workers I assume to draw the average earnings of £45 a year already referred to, which amounts to £630,000,000. With the £25,000,000 of the unfortunate 1,000,000 persons we arrive at £655,000,000 as the total earnings of the manual labourers in 1904.

“We have now got out the aggregate income of the United Kingdom, made up as follows :—

(a) Those with over £3 a week… £830,000,00

(b) Those with less than £3 a week (Manual workers £655,000,000 plus, lower middle classes,

£225,000,000) ……£880,000,000

……………….£1,710,000,000

“It will be seen that the income respectively above and below the income tax line of £3 per week is almost equal in amount. £830,000,000 lies above the line ; £880,000,000 lies below the line.

“The important consideration now arises, how many people enjoy these respective amounts of income—how many people in our nation of 43,000,000 people have over £3 per week? This important question I have been able to answer, and as the method of obtaining the answer has survived a great deal of both friendly and hostile criticism, it may be taken as being as nearly accurate as is needed for a proper judgment to be formed in the matter. The number of income tax paying individuals is, as nearly as possible, one million. It follows that nearly half of the income of the nation is possessed by one million people, who, if each of them be taken as a representative of a family of five, stand for only 5,000,000 people in the nation of 43,000,000 people. The second half of the national dividend is shared up by the balance of the nation, viz., 38,000,000 of people.

“These are exceedingly significant and extraordinary facts, but even more significant and extraordinary is the further calculation which I will now put before you.

“I have been able to split up the one million income tax payers at the £700 a year line. Between £160 a year and £700 a year there are 750,000 taxpayers, representing 3¾ millions of people, who take only £245,000,000 out of the £830,000,000. The balance of the £830,000,000 is £585,000,000, and this enormous sum is the annual income of only 250,000 taxpayers, who represent with their families not more than 1¼ million of the entire population. Broadly speaking, one-thirtieth of the entire population take more than one-third of the entire national dividend of the country. To put it in another way, 1¼ million people take in rent and interest a sum as large as the entire earnings of the manual labour classes, who, with their dependents, number 30,000,000 of people.

“The 250,000 taxpayers who take nearly £600,000,000 worth of income, include in their number, of course, the owners of practically all the factories, docks, warehouses and workshops of the country. The small number of income tax payers will, perhaps, not seem so surprising if it is remembered that there are only 100,000 factories in the whole of the United Kingdom, while the total number of factories, workshops, docks, wharves, quays, and warehouses registered in the United Kingdom does not amount to more than about 250,000.

“There is much talk of small shareholders, but as a matter of fact, shareholders, both large and small, are remarkably few. There is a firm in the City—Messrs. George S. Smith and Son—who collect all shareholders’ names, and make an alphabetical list of them for advertising purposes. Mr. George Smith informs me that there are only 500,000 names on his lists, which are practically complete, so that of the 1,000,000 people above the income tax line, only one-half are shareowners. The whole of the railway stock of the country is owned by only 180,000 people.

“It would be the easiest possible matter, if I had time, to put before you hundreds of current balance sheets, and to show you by existing examples the manufacture in detail of the contrasting elements of Riches and Poverty, which I have already shown you in the gross. The process is going on every where around us, and I hold that it is futile to talk about remedies for sweating while we consent to methods which produce poor people who, in their turn, are catered for by the supply of sweated products. The poor are the chief customers of the sweater.

“I do not propose to place many examples before you, but content myself by presenting several striking ones which may be taken as illustrative rather than exceptional. I have examined for 1904 the balance sheet of Messrs J. Lyons and Co., who employ a very large number of young girls at low wages. I find that the Company’s gross profits on trading for that year are £474,000, while salaries, wages, rents, rates, repairs, horse-keep, maintenance, etc., only come to £327,000. There was, therefore, a net profit of £147,000. I don’t know exactly what salaries and wages come to, but it is clear from the balance sheet that they were less than the £147,000 worth of profit. Thus the sleeping partners got more than the working partners.

“The case of the Newcastle-on-Tyne Electric Supply Company Limited is even clearer. I have the balance sheet for 1905 which shows that the people of Newcastle paid the Company £145,000 for Electric current, etc., and that the Company paid for rent, coal, etc., only £37,000 ; for wages only £34,000, leaving a profit of £74,000. Here the sleeping partners took far more than the working partners.

“Take again the National Telephone Company’s balance sheet for 1904. The public paid the Company £2,000,000, and the total outlay for rents, wages, materials, management, etc., was £1,150,000 leaving a net profit of £850,000. It is perfectly clear from these figures that the sleeping partners took far more than the working partners.

“I should like it to be particularly observed that when I refer to wages in connection with these balance sheets I mean not only wages for manual labour but for mental labour also.

“I repeat that it is unnecessary to multiply examples but these lamentable contrasts between profits and wages are a common-place of limited ability balance sheets.

“It is the fact that the underpayment of labour is deliberately counted upon which makes it possible for company promoters to promise large dividends. Thus, in a gas company prospectus issued in the public press in 1905, it was deliberately calculated that labour, manual and mental, would cost less than £2,000 per annum, while nearly £6,000 of profit per annum would result from the operations.

“It should not be forgotten, also, that ursury grows by what it feeds on. As soon as the big dividend is realised, ursury can claim its capital value in the stock market and the rise in value of the shares, instead of adding to the remuneration of the worker, actually becomes a weapon to be used against him. This, again, I may illustrate. I wrote in the Daily News of the 30 per cent. dividends and the low wages of Messrs. Lyons and Co. An indignant shareholder immediately wrote to me to point out that: “Most of the shareholders have paid £6 or £7 per share, and so get a return of not more than 5 per cent.”

Fifty Years of “Progress” ! (1925)

From the December 1925 issue of the Socialist Standard

The Economic Position of the Workers.

(Concluded from last issue)

We have now seen how pauperism has grown over the last 50 years and how the workers have become poorer during the latter half of that period, and it is time to ask whether the capitalist class have shared that poverty. On the contrary we find that in respect of the wealth produced this country has grown continually richer up to 1914. Sir W. Beveridge (Econ. Journal, Dec., 1923) gives the following figures of Real Income per head of the population, after allowing for the movement of prices. The figures represent, therefore, a statement of the production of “real” wealth, not merely money prices :—

1860 £26.0

1870 £29.6

1880 £34.1

1890 £40.0

1900 £45.9

1910 £46.9

He clearly explains that while more wealth was being produced it was only the workers who suffered, their loss being the gain of the propertied class.

“From 1900-1913 we lived on a rising tide. This also is an element favouring capital as against labour, profits, rather than wages.”

And again :

“The smooth development of Victorian days was broken, but the characteristic of the time was inequality of fortune rather than general misfortune ; discontent rather than poverty; a gain by capital in relation to labour, by profits in relation to wages, by some classes of workmen at the expense of others, even more than a check to our progress as a nation.”

Least of all was the poverty of the workers due to natural causes:

“Europe on the eve of war was not threatened with a falling standard of life because nature’s response to further increase in population was diminishing. It was not diminishing; it was increasing. Europe on the eve of war was not threatened with hunger by a rising real cost of corn ; the real cost of corn was not rising ; it was falling.”

A. L. Bowley (“The Change in the Distribution of the National Income, 1880-1913”) estimates the division of the national income as between “Property” and “Wages” at 37½ per cent, and 62½ per cent, respectively; and, further, that this percentage was nearly constant over the period. In this he differs from Mulhall (“Dictionary of Statistics”), who considered that in 1881 the percentage going to property was only 21 per cent. Sir Josiah Stamp (Statistical Journal, July, 1919) estimated the then percentage of “Property” at 32 per cent.

It is, however, necessary to point out how misleading is the classification used by all the above. An enormous number of workers are not engaged in the production and distribution of wealth at all, but are simply employed as personal servants or as profit “snatchers” out of the field of production proper.

Thus the services of the cook and the gardener and the valet are obviously enjoyed only by their employer, the property owner.

Yet in the above classification their wages go to swell the proportion of the “workers.”

If we follow the more useful method adopted by Sir Leo Chiozza Money, the picture is presented in another light. He shows how much of the wealth produced actually goes to the workers who produce it.

He estimates the wealth produced in 1913 at £2,150 millions, and says :—

“The manual workers, who, with their dependents, accounted for about two-thirds of the entire population, took about one-third of the entire national income, while the income-tax payers, with their dependents, forming only about 5,000,000 of the population, drew nearly as much as the remaining 41,000,000.” (Fifty Points about Capitalism, p. 13.)

The remaining portion went to the 4,000,000 clerks, shopkeepers and assistants, small farmers, etc. He considers that the division remained in 1924 approximately what it had been in 1913.

The exploitation of the workers is well illustrated from another angle by the statement made by Mr. Spencer. Liberal M.P. for Bradford, and quoted from the Daily News (New Leader, October 19th, 1923) : —

“If you look at the returns of the profits of this firm (Saltaire, Ltd.), you will find that by good management and skill they made a profit of £137 per head on each of their workpeople. Sir Isaac Holden,. Ltd., the woolcombers, made a profit of £140 per head of their workpeople last year. …”

Here we see how the workers’ wages could be doubled out of the wealth they produce.

We may notice here how the same process of declining real wages and increasing profits has gone on in America.

“In the period from 1897 to 1915, when real wages were falling in spite of an enormous increase in national production, business profits far outran the rise in the general price level. . . . From 1897- 1913 railroad and industrial stocks advanced about 100 per cent. . . . Moreover, this was a period in which huge corporate surpluses were being set aside out of profits.”—(American Economic Review, March, 1925.)

WHO OWNS “YOUR COUNTRY”?

As for the distribution of capital (as distinct from that of annual income), Professor Henry Clay (Times, March 24th,1925) wrote : “It is probably safe to say that over two-thirds of the national capital is held by less than 2 per cent, of the people.” As he also pointed out, such inequality was unknown in eighteenth century England.

WASTE OF WEALTH.

Last of all we come to the question of our wasted powers of production. While the workers grow poorer, it is becoming ever easier to produce the things they lack. Labour, land, machinery, etc., exist in excess of society’s needs, and only capitalism forbids the production of wealth for the use of those who do not possess legal rights to property in the means of life.

Sir Leo Chiozza Money estimates that 1923 production was from 15 per cent. to 20 per cent. less than that in 1913 (New Leader, January 4th, 1924), and shows (“Fifty Points,” p. 44) that in 1907

“counting as a man a male worker aged 18 years and upwards, there were only 4¼ million engaged in producing. . . . The remaining 10,000,000 workers were engaged in transport, or commerce, or professions. When allowance is made for the useful workers amongst these, it is clear that the nation has to support millions of persons condemned by the capitalist system to be non-producers.”

To this add the enormous increase in numbers of unemployed and the still greater increase in powers of potential production due to inventions, etc., and we can then realise how the workers’ actual position compares with what economic conditions would permit it to be under another system of society.

If we take a few typical industries we shall see how great the development is, and also what are the effects of greater efficiency under this system. Thus Mr. Coppock, giving evidence in March, 1925, before the Court of Inquiry presided over by Lord Bradbury, stated that whereas 3,000 million bricks were laid in 1914 by 73,671 bricklayers, in 1921 5,000 million bricks were laid by only 57,170 bricklayers. More efficiency and its accompanying less employment are threatened in still greater degree should a proposed bricklaying machine prove commercially profitable.

“The Triangular Construction Company, of Imber Court, Surrey, have given the first public trial to a simple piece of machinery, invented by Major W. H. Smith, its managing director, which, worked by one skilled bricklayer and a labourer, can erect the walling of houses at a rate equivalent to the laying of 15,000 bricks a day.”—(Daily News. October 21 si, 1925.)

In the agricultural industry of America, it is stated by T. G. Risley, Solicitor of the U.S. Department of Labour, that :—

“the American farm labourer produces an average of 12 tons of cereals per year, while the foreign farm labourer only produces 1½ tons of cereals per year. … In 1920 there were 1,500,000 fewer men on farms in America than in 1910, yet the crops produced were one-third greater in 1920.(O.B.U. Bulletin, Winnipeg, October 1st, 1925.)

In the automobile factories in the U.S.A. the following startling progress has occurred. The figures represent the average number of cars produced per worker per

annum in the various years : —

1899 1.66

1904 1.80

1909 2.47

1914 7.17

1919 8.97

1921 11.15

1923 16.11

They are taken from a report to the Department of Labour submitted by M. W. La Fever.

Almost every capitalist country and every industry could furnish evidence of like developments, and were the achievements of the most advanced countries applied all round, the task of producing all the reasonable requirements of the world’s peoples would be incredibly simple. Our powers of production are, in fact, as Sir Leo Chiozza Money puts it:—

“Our working power is not less, but far greater than our needs.”—(Triumph of Nationalisation, p. 18.)

ABOLISH CAPITALISM.

But these powers cannot be used to the full and freed from the hindrance of periodic crisis and depression, and the unemployed cannot be allowed to produce because the machinery of production is in the hands of the capitalist class or Governments and Municipalities controlled by them. Only the abolition of private ownership can remedy the evil for the workers. Failure to take this necessary step, and every year’s delay in doing so, leaves the workers faced with certain increase of unemployment, certain increase of insecurity, and certain worsening of their condition relative to that of the employing class, because of the inevitable growth of society’s powers of producing wealth. Although for a time, during the early expansion of capitalism, the workers were able to secure a rising standard of living, the tendency in all the leading capitalist nations, including the Colonies of the British Empire, has been for “real” wages to fall since the opening years of this century. While the level in this country may still be higher than that of 1870 (The L.R.D. figures would place it at about the level of 1880), there is no prospect of an improvement in any but the most backward areas of the capitalist world. Furthermore, unemployment and pauperism, “speeding up” and insecurity, have definitely operated to worsen the workers’ condition in relation to what it was fifty years ago. Lastly, and most important of all, while the workers have been getting worse off, the means of producing wealth have developed by leaps and bounds. If poverty in 1870 was a phenomenon which many well-meaning observers found incomprehensible, its existence in 1925 is a crime absolutely indefensible, and if only the workers realised, absolutely unnecessary.

Edgar Hardcastle

Do Wages determine Prices? (1925)

From the May 1925 issue of the Socialist Standard

The Socialist frequently encounters the illusion that prices of commodities generally are determined by, or in some way based upon, the wages of the workers producing those commodities. This illusion is common amongst members of all political parties to which we are opposed. Who has not met the Tory who regards strikes for higher wages as responsible for the high cost of living? or the Labourite who holds that strikes are useless because the capitalist can always recoup himself for an advance in wages by raising prices? In fact it is curious to note that the Tory and the Labourite both lead the worker to the same false move, i.e., the abandonment of the strike weapon. No Socialist exaggerates the value of that weapon, but likewise no Socialist is fool enough to propose to discard it under capitalism.

The illusion referred to rests upon ignorance of the economic laws of present-day capitalist society. The person suffering from the illusion regards wages and prices as quantities arbitrarily fixed, either by the workers or the capitalists, or both. Prices are conceived by him as a compound of wages plus other cost of production. (raw material, machinery, etc.) plus a certain percentage of profit which is decided, apparently, by the capitalists’ own sweet will; yet a moment’s reflection should show that if the capitalist had the power to manipulate prices how and when he liked, there is no limit to the profit he would charge !

A reference to one well-established and widely-known fact should be sufficient to knock the bottom out of the fallacy. Soon after the outbreak of war in 1914 prices commenced to soar to a level 100 per cent. to 200 per cent. above their starting point. Was this the effect of a rise in wages? Obviously not! Wages did not commence to rise till after the general rise in prices commenced. Wages rose in fact only because the rise in prices made it impossible for the workers to continue producing wealth with their diminished purchasing power. Was the rise in prices due to a sudden increase in the greed of the capitalists? Again the supposition is absurd. Capital’s greed is constant. That which varies is the condition for its satisfaction. It was the alteration of this condition (i.e., the increased difficulties of production due to depletion of man-power in the factories, etc., coupled with the increased demands for various forms of wealth, munitions, etc., by the various States) which provided the reason for the rise.

One striking and important feature of this example, too, is this : that in spite of the national emergency and the impossibility of the workers living on the old wage, the wage rate rose only as a result of a struggle on the part of the workers themselves. This is the answer to our opponents of all shades who from time to time suggest that wages can be safely left to regulate themselves.

Having said this much, let us examine the actual basis of wages. Wages, in reality, are the price of a commodity, namely, labour-power. As such they are determined by the cost of production of that commodity, that is to say, they are based on the cost of living of the working class. The prices of other commodities are ultimately determined in a similar manner. The cost of production in terms of the labour-time spent in production (not, mark simply the money advanced by the capitalist), forms the value of a commodity which is expressed in its price.

Prices, however, are not maintained at value-level, automatically, but are arrived at as a result of competition between buyers and sellers. According to the variations, in the state of the market, prices fluctuate above and below the value-level. Wages are no exception. Only the constant vigilance of the sellers of labour-power, the workers, can prevent wages being pushed below subsistence level. Herein lies the economic justification of the strike, i.e., the refusal to sell labour-power except on certain terms. Wages, then, are not determined apart from the struggle between the classes; they are an essential feature of the system in which that struggle is involved. Profits are the difference between wages and the total wealth produced.

Another important point arising from the example quoted is the following : whereas wages lagged behind other prices in rising, after the war they were first to fall ! Here, again, we are not dealing with mere spitefulness on the part of the master class, but with a notable feature of the system by which they profit, i.e., the steady improvement in their strategic position on the economic field. During the war the introduction of more up-to-date machinery and new methods of industrial organisation had been stimulated by the factors above mentioned. Consequently, when demobilisation replenished the labour market, thousands found their occupations gone for ever. The normal process of capitalist development, expressing itself in an increase in the industrial reserve army (the unemployed), greater concentration of accumulated capital and relative lessening of the workers’ powers of resistance, had been accelerated.

So far, then, is experience from bearing out the utopian conceptions of the Tory and the Labourite, that the class struggle in its primary form, i.e., the struggle over wages, is indeed more desperate than ever, For the workers the position grows progressively worse, yet some people consider this an argument for abandoning the struggle. The Socialist realises more than anyone the hopelessness of the struggle so long as the workers confine their efforts to dealing with effects on the economic field, but this only leads him to emphasise the necessity of pushing the struggle into the political arena with a view to removing the cause. This, we proclaim, is the private ownership of the means of life. So long as the capitalist class own and control the sources of raw material and the means by which that raw material is worked up into useful articles and distributed among the population, just so long will the workers be compelled to struggle for wages, representing a steadily-falling standard of life. So long as the present system exists, so long will the few idlers monopolise the comfort and leisure which modern industry can make available for all. Are you content, fellow-workers, to be for ever slaves, to go through life branded by your wages with the status of commodities? If not, then study Socialism!

Eric Boden

Letter: The Socialist Party and Trade Unions. (1923)

Letter to the Editors from the October 1923 issue of the Socialist Standard

Manchester,

July 5th, 1923.

Comrades,

Your contention that the workers do not pay rates and taxes on the basis that what he hasn’t got he cannot part with has always seemed to me quite sound. But in this month’s Socialist Standard Comrade Reynolds declares, “For, bad as the condition of the working class is, only a fool would deny that it could be far worse.” This seems to me to contradict the above, for if his condition can be made worse, to say nothing of far worse, it surely can be made so by the capitalists collectively (taxation) as by the capitalists individually (wages).

The point I would wish to make is that, according to our friend Reynolds, the worker has a surplus or margin above the bare subsistence level, thus rendering him susceptible to taxation in his degree even as the man with £10,000 a year.

Yours fraternally,

Inquirer.

Reply:

Our contention that taxation does not affect the working class is in no way contradicted by the statement quoted from the July Socialist Standard. The statement is made to indicate the fact that the struggle of the workers on the economic field over the question of wages, hours, and the general conditions of employment does to some extent act as a brake upon the tendency of capitalism to worsen the condition of the working class. The writer does not imply that the workers have “a surplus or margin above the bare subsistence level, thus rendering them susceptible to taxation”; on the contrary, he implies that it is necessary for the workers to carry on the struggle in order that they should realise the value of their labour-power.

Of course, the workers have no surplus above the subsistence level, out of which to pay taxes. But it does not follow that because of that fact their condition could not be worse than it is at present. The social condition of the workers not only could be worse, but is actually becoming so as capitalism develops. For instance, as more efficient methods of wealth production are introduced, unemployment increases, and, with the consequent increase of competition for jobs, the workers are subject to a more intensive exploitation, their position is more insecure, and their poverty becomes greater than ever.

Now “Inquirer” seems to be of the opinion that the level of subsistence is a fixed point. But that is not the case. The workers sell their energy to the capitalist at the cost of their subsistence, but the cost of subsistence depends upon, among other things, the standard of living which varies, in different trades and in different countries. The standard of living is a product of historical and social forces, and may be raised or lowered. As Marx puts it :

  “The value of labour is in every country determined by a traditional standard of life. It is not a mere physical life, but it is the satisfaction of certain wants springing from the social conditions in which people are placed and reared up. The English standard of life may be reduced to the Irish standard ; the standard of life of a German peasant to that of a Livonian peasant.”— (“Value, Price and Profit.”)

And, as the whole history of capitalism shows, the tendency is in the direction of lowering the standard of living of the workers, to the extent, to use the words of Marx, of reducing the whole working class to the “utmost state of degradation.” Around this question of the standard of living a constant struggle goes on between the workers and the capitalists. The former endeavouring to maintain it at a certain level, and the latter endeavouring to reduce it to its lowest point. It is precisely here where the organisation of the workers on the economic field functions. By means of withholding their labour-power, or threatening to do so, the workers do, to a certain extent, put a brake upon the encroachments of capital. In other words, whilst the workers by trade union action cannot altogether prevent the worsening of the social condition, they can slow down the worsening process.

To state such an obvious truth, namely, that the condition of the workers could be far worse, is something totally different from saying that the workers have a surplus above the subsistence level out of which to pay taxes. For the workers to be susceptible to taxation would necessitate their getting a surplus above the amount necessary for their subsistence as wealth producers for the capitalists, and this they do not get. Consequently, the capitalists cannot make the condition of the workers worse by means of taxation. They can and do, however, by means of reducing wages and intensifying exploitation, a fact with which we as workers are painfully acquainted.

Robert Reynolds