The continuing trade war (1987)

From the Winter 1987-88 issue of the World Socialist

For a long time we have been hearing about "the trade war" with Japan. According to the media, the whole populations of America and Britain have been incensed about the flood of Japanese imports and the reluctance of the Japanese to buy foreign goods, and are demanding that their governments put pressure on Japan to stop it.

This is a half-truth that is wholly misleading. The American and British companies making fat profits importing Japanese goods, and their customers who buy them, are not incensed and are not asking their governments to do anything. They "buy Japanese" because the goods are cheap, and they want to go on buying them. The people who do want it stopped and who happen to have got the support of their governments are those American and British manufacturers who are being driven out of business because they cannot produce as cheaply as can their Japanese rivals. It is a development seen many times before in the history of world capitalism, but with different countries taking the leading role.

At first it was Britain, "the workshop of the world", which flooded other countries with its cheap manufactures. Among the later leaders have been the USA and Germany. Now it is Japan, but in due course it will be the Japanese manufacturers complaining about cheap imports. Already there are signs of this but it will be the Japanese manufacturers who will complain, not the Japanese import companies and their customers.

The important aspect of this to take note of is that it is just one example of the sectional conflicts of interest inside the capitalist class in each country — those who favour "free trade" and those who favour protective tariffs; the borrowers who want interest rates to fell and the lenders who want them to rise; the export industries pressing for a lower foreign exchange rate for the currency and the import industries pressing for a higher rate; and the capitalists who want inflation with its higher prices, those wanting deflation with its lower prices and those who prefer the gold standard and a stable price level.

Illusions about Free Trade

The row with Japan raises the issue of Free Trade. In the mid-nineteen century two Liberal politicians, Cobden and Bright, evolved a comprehensive theory. Each country should, they said, cease all forms of discrimination against foreign goods and always buy in the cheapest market. Prices would fall, production would increase and all would benefit through universal peace and prosperity.

It suited British manufacturers at the time because the cheapness of their manufactures would give them access to the markets of all countries operating a free trade policy. The Tory, Benjamin Disraeli, understood the world better than did the Cobdenites when he said that "the Continent will not suffer England to be the workshop of the World". Not only was he right about that, but within thirty years, when British goods no longer had the advantage of cheapness, the manufacturers were campaigning for protection against foreign imports.

The error of the Cobdenites was in their belief that the nations are simple geographical associations of manufacturers, traders and workers happily co operating together and ready to join with those in other nations to the advantage of all the people. As a picture of the one hundred and sixty nations in the world it is not recognisable. Capitalism is not like that. In all the nations there is exploitation of one class by another, production carried on for sale and profit, and armed forces both to protect the property of the owners and to maintain their interests against the other nations. The nations were born in conflict and live in conflict.

The nations came into existence, with greater or less violence, out of the break-up of the old empires such as the Turkish and Austro-Hungarian, and later, out of the dismantling of the British, French, Spanish and Portuguese colonial empires. How violently, can be seen in our own times because nation-forming is still going on: the creation of Israel and its wars with neighbouring states; the breakaway of Bangladesh from Pakistan and of Pakistan from India, which now faces separatist movements of the Sikhs in the Punjab and the Ghurkas in West Bengal; the Corsican independence struggle against France and of the Basques against Spain; the Tamils in Sri Lanka and the movements by the Kurds in Turkey, Syria, Iraq and Iran to form a Kurdish nation. In other parts of the world there are similar movements including parts of Russia. Twenty years ago the Nigerian government in a bloody civil war beat off an attempt by oil-rich Biafra to form an independent state.

There is a common pattern in all the past and present, successful and unsuccessful attempts to form new nations. Local groups of politicians and businessmen who think they can do better for themselves on their own form so-called national independence movements, using as their power-base local populations having the same language, or religion, or tribal loyalties or the the same facts or legends of history (some Israelis invoke the real or supposed events of 2,000 years ago).

Constant battle for resources and trade routes

Marx and Engels sketched out the nation-forming process in the Communist Manifesto in 1848. In opposition to the idealised vision of Cobden and Bright, Marx and Engels wrote:

The bourgeoisie finds itself in a constant battle . . . at all times, with the bourgeoisie of foreign nations.

The principal forms taken by the constant battle are attempts to grab sources of raw materials, minerals and fuels needed for industry and the need to protect the sea and air routes along which they are transported. An interesting example comes from Alsace and Lorraine. Acquired by France in the 17th and 18th centuries, this area was taken in war by Germany in 1870; reoccupied by France in 1918; retaken by Germany in 1939 and returned to France again after World War II. The lure was the rich iron ore deposits.

Then there is the so-called trade war between the nations. It has been widely misunderstood and has produced a crop of fallacious theories from economists and others to explain how it works. It can happen, though instances are few, that a group of capitalists can induce the government to turn trade war into real war, as when, early in the 19th century, Britain made war on China to force the Chinese government to allow the import of opium into China.

The extent to which a nation depends on foreign trade reflects the extent to which it has all the resources it needs within its own borders. For the USA and Russia, with their great land mass, exports are only ten per cent of total production and are correspondingly of limited importance except to the industries concerned. For Britain it is about 30 per cent and for Belgium, Switzerland and some other countries very much more.

In general foreign trade ranks in importance far below the vital strategic interests of the nations. Despite the long "trade war" between the USA and Japan no one has suggested that it might lead to real war: the mutual interest of the two governments in strategic control of the Pacific is much too vital. As Professor Edwin Cannan pointed out during the 1914 war:

Where there are not supposed to be divergent strategic interests, no amount of divergent or supposedly divergent commercial interests produces either war or preparations for war.

Several writers, including J.A. Hobson, Major Douglas, founder of the Social Credit movement, and the economist J.M. Keynes, took a different view, giving the pressure to find export markets an importance out of all proportion. Keynes, in particular (in the last chapter of his General Theory), holding that the pressure to export is a principal cause of war. All three based their theories on a supposed, but in fact non-existent, overall "deficiency of purchasing-power" in every nation.

Fallacies about why countries export

The governments in all countries face an acute political problem in the discontent that arises if large numbers of workers are unemployed. They and their advisers are therefore concerned to find out what it is that causes the periodic crises, and the depressions which follow the crises, that are an inevitable feature of the whole modern world.

One of the flimsiest of the anti-Marxist theories selects as the cause of crises the restricted purchasing power of the working class. Because the ability of the workers to buy consumer goods is limited to their wages, the theory held that the industries producing consumer goods soon find themselves in financial difficulties as they compete with each other for a limited market, so a crisis occurs. This theory was known to Marx, who ridiculed it. He pointed out that in the boom which is the forerunner of every crisis, the wages of the whole working class not only rise because wage-rates rise and more workers are in work, but the working-class "get a larger share of the annual product intended for consumption". So the sales of the consumer goods industries do not go down but go up. As Marx said, "such a period should rather remove a crisis".

Hobson, Douglas and Keynes put forward a more substantial version of the deficiency theory. They argued that the combined purchasing power of the capitalists and the workers together is insufficient to buy all the commodities on sale in the market. They offered different reasons for this deficiency. Hobson said it was due to the existence of monopolies, Douglas said it was because the government did not put enough currency (notes and coins) into circulation. Keynes said it was because the government borrowed and spent too little to create full employment.

There is no need to go into the details of their theories because history has disproved all of them. Crises and depressions with mass unemployment have occurred before monopolies were formed and after they had been suppressed. The amount of currency in circulation in the 1980's when unemployment has been over three million is a dozen times more than it was in the 1950's when there was a continuing labour shortage. There has been a similar big increase of government borrowing and spending in the 1980's compared with the 1950's.

Louis Boudin, who had written usefully about Marxian economics in The Theoretical System of Karl Marx, went quite off the rails about the supposed deficiency of purchasing power and consequent compulsive pressure to find markets for exports. He argued that industrially developed countries cannot export to each other at all. Their only outlet, he said, is in primitive economies not yet in the sphere of capitalism. So, as those economies become industrially developed all exports would dry up. Rosa Luxemburg put forward a similar theory in her book the Accumulation of Capital. Boudin and Luxemburg expressed these views some seventy years ago, but the volume of world trade now is enormously greater than it was then, most of it between the industrially developed nations.

If it were true that capitalists have to export because of a deficiency of purchasing power at home and therefore British capitalism had to export £75,000 million of commodities in 1985, who is it who bought the £80,000 millions of imports?

The Marxian Position

Marx dealt with and disposed of the whole deficiency theory. There is not and cannot be an overall deficiency of purchasing power to buy all the commodities on sale in the market; however possessing purchasing-power is not the same as using it at once to buy the commodities in the market.

Marx made this point in his reply to the French economist J. B. Say, in the first volume of Capital (Chapter on Money, or the circulation of commodities). Say held that serious depression is impossible because, in his phrase, "every seller brings a buyer to market"; by which he meant that every capitalist who has sold commodities then has the money with which to go out at once and buy other commodities. To which Marx replied by pointing out that being able to buy at once does not mean that the capitalist has to buy at once. "No-one is forthwith bound to purchase, because he has just sold." He went to say:

If the interval in time . . . between the sale and the purchase becomes too pronounced the intimate connection between them, their oneness, asserts itself by producing — a crisis.

If the buyers of a certain line of commodities suddenly cease to buy them the industry producing the commodities is in financial trouble.

This happens because in every boom some industries overproduce for their particular market. Prices drop, profit margins disappear and production is curtailed or halted. Because of growing unemployment, the total wage of the working class falls and with it the sale or consumer goods too.

Capitalists produce to make a profit. They are not interested in production for its own sake. It is how capitalists behave that causes crisis, not the limited purchasing power of the working class.

What about imports?

It has to be emphasised that the "trade war" is not just about exports but about both imports and exports. The pressure behind both is the same, the search for profits by the import and export capitalists.

The competition is the same. Export capitalists compete with each other for overseas markets and with foreign manufacturers. Import capitalists compete with each other and with foreign manufacturers for access to the home market. Each section seeks to get the backing of the government and some governments help export industries with subsidies. But equally, some governments put obstacles in the way of the export industries in order to help home producers.

At the beginning of the century the British government levied a heavy tax on every ton of coal exported. The coal owners objected but it was welcomed by British factory owners because it meant lower coal prices in the home market. The Argentine government levies a tax on the export of wheat and the Indian government fixes a minimum price for the export of tea. Only the high-priced tea can be exported, with the effect of keeping prices low and promoting sales in the home market. Developing nations producing raw materials to be manufactured abroad eventually decide to restrict exports in order to promote the development of manufacture at home. It all depends on which section of the capitalist class succeeds in getting government support for its particular benefit.

Edgar Hardcastle (Britain)

Blogger's Note:

As both Louis Boudin and Rosa Luxemburg are mentioned in Hardcastle's article, readers might be interested in the following articles and book reviews from the pages of the Socialist Standard and the Western Socialist that covers both writers in greater detail:

• A review of Louis Boudin's The Theoretical System of Karl Marx by Ren (1968 No. 3 issue of The Western Socialist)
• A review of Louis Boudin's The Theoretical System of Karl Marx by Edgar Hardcastle (August 1968 issue of the Socialist Standard)
• Rosa Luxemburg and the Collapse of Capitalism by John Crump (January 1969 issue of the Socialist Standard)

Labour under Liberal Rule. (1911)

Book Review from the October 1911 issue of the Socialist Standard

What the Workers owe the “Great Liberal Party”.

L. T. Hobhouse, M. A., Professor of Sociology at London University, is the author of a book on Liberalism (Home University Library). The book coming from a well-known supporter of the Liberal party, many may turn to it expecting to find a serious examination of the aims and methods of Liberalism. The capitalist Press has been profuse in its praise, but those who seek a knowledge of Liberalism will get little direct information therein.

Our Liberal apologist indulges in a long academic dissertation upon Manchesterism, Benthanism, abstract ideas, and absolute rights, and throughout the book there runs the hypocritical plea that Liberalism, from its inception to the present day, has carefully guarded

THE INTERESTS OF THE WORKER

and made his lot better and brighter.

The real position and interest of rising Liberalism is not dwelt upon, but an understanding of it is essential.

The Liberal Party represented the developing manufacturing class, the merchants, etc., who found the progress of their order hindered by the old forms that had survived from feudal days. The landowners, the nobility and the clergy had placed various restrictions upon the trading class—the bourgeoisie. It had imposed taxes and tariffs, and made the trader and the manufacturer bear the greatest part of the expenses of carrying on the various wars.

The Liberal Party arose an a protest against the prevailing semi-feudal institutions. Representing, as it did, the manufacturers and middlemen, it objected to any interference by the landowning legislature. In its battle against them it was aided by the workers, but when the Liberals had won their battle they spurned and betrayed those whom they had beguiled into helping them.

Laissez-faire, the gospel of the Liberals, was a policy conceived in the direct interest of the industrial capitalists.

It believed that no limits or restraints should be put by the State to the rate at which they could pile up wealth and

MURDER THE TOILERS

and their children in the process. Our author says:

“The condition produced by the new factory system shocked the public conscience and as early as 1802 we find the first of a long series of laws out of which has grown an industrial code that year by year follows the life of the operative in his relations with his employer into more minute detail. The first stages of this movement were contemplated with doubt and distrust by many men of Liberal sympathies.”

Thus cowardly and cunningly does the Professor of Liberalism hide the savage ferocity with which the members of the “Great Liberal Party” opposed all attempts to improve the conditions of the Capitalism’s insatiable greed.

The Legislature had enclosed the land, driven the labourer from the soil, and confiscated his cottage. The artizan found his simple tools and plant superseded by the giant machinery and factories that had arisen all around him. These propertyless workers were forced to seek work from the Liberal manufacturers, who took a fearful advantage of their outcast condition. These manufacturers piled up huge wealth by the unlimited toil of men, women, girls and tiny children. They used every subterfuge to prevent any legal limits being placed to the crushing slavery even of tender little ones. In the forefront of this great army of industrial murderers stood the champions of Liberalism, John Bright, Richard Cobden, C. P. Villiers, W. R. Greg, and W. J. Fox. Bright and Cobden are the revered pioneers of the present Liberal party, and the book under review is lavish in its praise of these

PIOUS PURITAN HUMBUGS.

Hobhouse says to the Liberals: “Rather we want to learn our supreme lesson from the school of Cobden.” The history of the attitude of the Liberal party toward the awful sufferings of the working class in those early days has more than a passing interest for workmen. Their record in opposing factory legislation, trade unionism, manhood suffrage, etc., is pregnant with significance. For insight into their actions then, helps to show the true nature of their motives and methods in the present.

We have the following admission grudgingly made (p. 88):

“It is true that in the beginning factory legislation enjoyed a large measure of Conservative support. It was at that stage in accordance with the best traditions of paternal rule, and it commended itself to the religious convictions of men of whom Lord Shaftesbury was the typical example. It is true also that it was bitterly opposed by Cobden and Bright.”

But our Liberal apologist seeks to water down their opposition and lead the workers to believe that it was a very transient one.

No more damning indictment of Liberalism could be penned than a bare description of the awful condition of the workers in the days when the Liberal manufacturers were uncontrolled by factory laws. The toilers’ Inferno has been truly described in the pages of Engels’s “Condition of the Working Class in England in 1844.”

Richard Cobden owned print and cotton works at Manchester (R. Cobden & Co.), and his life, written by that Czar of India, Morley, is replete with

DETAILS OF HIS VILLAINY.

Speaking of Cobden’s opposition to the legal shortening of the working day, Morley says, p. 68,

“What he maintained was that all restrictions, however desirable, ought to be secured by the resolute demands and independent, action of the workmen themselves, and not by the intervention of the law.”

But when the workmen did try to obtain shorter hours and better conditions, what did Cobden say ? Listen to Morley (p. 68) :

“Singularly enough, while he thus trusted to the independence of the workmen, he objected to workmen’s combinations. ‘Depend upon it,’ he wrote to his brother, F. W. Cobden (Aug. 16, 1842), ‘nothing can be got from fraternising with trade unions. They are founded upon principles of brutal tyranny and monopoly. 1 would rather live under a Dey of Algiers than a Trades Committee.’”

Cobdcn’s co-worker, John Bright, was a Rochdale cotton manufacturer (John Bright and Bros.) He was highly esteemed by the Liberal party, was a member of their Cabinet, and acted as their champion against the struggling wage-slaves. His biographer, C. A. Vince, the leader of the Birmingham Liberals, says of one occasion (“John Bright,” p. 19) :

“In August 1842, a general strike or, as it was then called, a turn out, was organised in Lancashire. Bright issued a long address

TO THE WORKINGMEN OF ROCHDALE,

urging them to return to their employment. ‘Neither act of Parliament nor act of a multitude can keep up wages. You know that trade has long been bad, and with a bad trade wages cannot rise. If you are resolved to compel an advance of wages you cannot compel manufacturers to give you employment. Such attempts must always fail in the end and yours must fail.’ ”

This was always the cry : “Bad trade !” Yet they were running their mills day and night, and gaining huge profits. These were truly the days when “Capital celebrated its bacchanalia.”

Yet present-day Liberals delight to talk of the “Hungry Forties,” and identify the landlords alone with the horrible sufferings of the people. Vince, speaking of Fielden’s (M.P. for Oldham) Bill to limit the labour of women and young persons to 60 hours per week, says :

“This Bill was opposed by Peel, Cobden, Bright, and Mr. Villiers, and rejected by a small minority. . . . Bright had already successfully resisted a proposal made by Lord Ashley (afterwards Lord Shaftesbury) two years earlier. His speech on that occasion had of necessity been acrimonious.”

The method of the Liberals was to claim that the condition of their workpeople was better

THAN THAT OF THE TORY LANDOWNERS’ TENANTS.

But it wasn’t true, as was easily proved.

Bright urged against the Bill of 1844 for limiting the labour of children under 13, that it would mean shortening the hours of adults too. And Vince says (p. 33)

“That this was the intention, as well as the effect, of the Bill, was proved by the refusal to accept an amendment of Bright’s to allow the women to work in relays”

He declared that if the Bill passed they would have to close their factories ! This was the cunning way of these past masters in trickery. They opposed the reduction of children’s hours by talking of its effect upon men’s hours. ” ‘Most of our evils,’ says Bright” (quoted Vince, p. 34) “‘arise from legislative interference,’ and this maxim, eminently characteristic of the Manchester school, continued to approve itself to him to the remainder of his career. . . . The same principle led Bright a few years later to throw cold water over Sir G. Forster’s Bill to strengthen the Truck Act. ‘Under the present condition of labour in the country there can be no permanent, continuous and irritating tyranny such as has been described by the promoters of the Bill, which the working classes are not perfectly well able to correct without coming to the House of Commons for a new measure !’ Finally, in 1855 he successfully resisted an attempt of J. M. Cobbett to improve the Factory Act.”

Thus did the Free Trade leader look after his pocket interests. He was not above raising the good old cry: “I’ll take my capital out of the country !” On page 36 Vince quotes Bright as saying :

“If I thought the elements of discord were again to be stirred up, I should myself be glad to leave the country and to

GO SOMEWHERE ELSE

where Capital and Labour are allowed to fight out their battles on their own ground without legislative interference.”

Vince further tells us that Bright “was also an enemy of any possible scheme of national education.”

The history of the fight for the Factory Acts is a record of the war of Liberal manufacturers against the slightest reduction of their enormous profits. The children—boys and girls—were semi-starved, flogged and brutally ill-treated for the slightest slackening of their terrible toil. Lord Shaftesbury, the Dorsetshire landlord, after long and bitter straggles, succeeded in getting a Bill passed during the Liberal administration of 1833. Bat it was such a hollow fraud that the battle continued for over 20 years longer. The Act of 1833 and other Acts were passed as a result of protracted warfare, but it was many years before the Government would vote a halfpenny to provide inspectors to see them carried out. The Acts long remained a dead letter. Even afterwards Leonard Hornerer and Alexander Redgrave—the best factory inspectors the workers ever knew—bitterly complained that when they brought cases into court they found the magistrate was the

LOCAL MANUFACTURER HIMSELF

and, of course the workers lost.

The Act of 1834 permitted 8 hours to be worked by children under 13, and young persons between 13 and 18 were allowed 12 hours actual work per day, but these regulations were not to come fully into operation till 1836. The Liberal Government with a majority of 307 refused Shaftesbury’s amendment to improve the Bill.

Shaftesbury introduced his 10 hours Bill (for young persons) in 1838, and the Parliament with a Liberal majority of 51 threw out the measure. Lord Melbourne was Prime Minister, and “The Times” (June 25, 1838) said :

“The public attention cannot be too forcibly directed to the scandalous conduct of the Melbourne Ministry with regard to the factory question. It was not that Lord Shaftesbury had been mocked and deluded by the broken promises and callous feeling of a mercenary and jobbing clique, but that laws of our making have been left unenforced and the unfortunate children unprotected, and that all the representations and remonstrances made to the members upon the subject had been treated with total neglect and contempt.”

It shows the unspeakable hypocrisy of the Liberals when we recall that it was this same Parliament with the largest majority of any in the 19th. century, that allowed children under 13 for years after to be employed for

72 HOURS PER WEEK

while in the “Emancipation” Act it limited the hours which adult Negro slaves could be worked by the planters to 45 per week !

The 10 Hours Bill came into force (partly) on May 1st., 1848, but the manufacturers rose up in a body against it. Karl Marx well says (“Capital,” chap. 8):

“The working class was everywhere placed under a ban, under a virtual law of suspects. The manufacturers had no need any longer to restrain themselves. They broke out in open revolt, not only against the 10 Hour Bill, but against the whole of the legislation that since 1833 had aimed at restricting in some measure the “free” exploitation of labour-power.

“It was a pro-slavery rebellion in miniature, carried on for over two years with a cynical recklessness and terrorist energy all the cheaper because the rebel capitalist risked nothing but the skin of his ‘hands.'”

The methods they pursued are beyond description, but they can be read in the factory inspectors’ reports for the years that followed. Sufficient to say here that they practically nullified the Acts. How well they carried out the nefarious work may be gathered from the speech of Mr. Ferrand in the House of Commons (27th. April, 1863):

“The cotton trade has existed for 90 years. It has existed for three generations of the English race, and I believe I may safely say that during that period it has

DESTROYED NINE GENERATIONS

of English operatives.”

In urging the claim of the Liberal party to working class support, Mr. Hobhouse says (p. 84): “Trade Unions gained the first step in emancipation through the action of Place and the Radicals in 1824.”

The fact is that the workers found the chief opponents of trade union combination in the Liberal-Radical party. The ferocity with which the workers were treated by the Liberal Government reminds one of the worst incidents of Russian rule. In 1824 Francis Place, the tailor, and Joseph Hume “smuggled” a law through Parliament annulling the Anti-Combination laws. But directly the workers sought to actually combine for defensive purposes the law pounced upon them. The presence of more than two workmen together laid them open to the charge of conspiracy, and in the reign of the strongest Liberal Government (1834) six Dorchester labourers were sentenced to seven years transportation for the “crime of combination.”

And again, under Liberal rule in 1838, five Glasgow spinners were condemned for the same term under the charge of illegal combination and conspiracy. Lord Melbourne and “the historian,” Lord Macaulay, were members of the Cabinet, and they did all they could to support those who were coining millions out of the blood and tears of women and children. They acted as in a panic and appointed numerous commissions to enquire into methods to

COMBAT AND SMASH WORKMEN’S UNIONS.

Bright, Cobden and Gladstone in their day were prominent enemies of working-class combination.

After long years of strife and suffering the workers got the Liberals to pass the Trade Union Act of 1871. This was proclaimed the “charter of the trade unions.” But it was so futile that the masters and the Courts still carried on a bitter war against the workmen. The following year (1872) some London firemen engaged at gasworks were charged with striking and sentenced to 12 months imprisonment.

Of Gladstone Mr. Hobhouse says (p. 103):

“He was not sympathetically disposed towards the ‘New Unionism’ and semi-Socialistic ideas that came at the end of the ’80’s, which, in fact, constituted a powerful cross-current to the work he had in hand.”

Right up to the present day the same class legislation in trade union matters continues. The Liberals claim to have legalised peaceful picketing by their Act of 1906, but it lies with the carefully selected judge to interpret this clause.

Hundreds of convictions have occurred since the Act was passed. The London polishers, the Newport dockers, the Hull seamen, the Belfast dockers and the agricultural labourers of Norwich—all have been fined or imprisoned for picketing amongst possible strike-breakers.

The Liberals, despite our author’s claim, in fact acted just as fraudulently

OVER THE SUFFRAGE

as on other issues. No mention is made of the long, terrible struggle on the part of the workers for a share in the franchise under Liberal Governments. Nothing is said about the ferocious fight the Liberals waged against the Chartist pioneers for simply advocating Manhood Suffrage. The trickery and treachery of the Liberals over “Household Franchise” in 1867 is completely passed over.

“The most striking victory of Liberal ideas,” Mr. Hobhouse tells us, “is the establishment of Free Trade,” and he points out that “the battle is one Liberalism is prepared to fight over again.” This shows the essentially capitalist character of Liberalism, for Free Trade is the manufacturer’s panacea, though it was obtained by deluding the working class and winning them away from Chartism by telling them, in the words of Cobden (Morley) : “Is it not clear that if capitalists were free to exchange their productions for the corn of other countries, the workmen would have abundant employment at enhanced wages ?”

Listen to Cobden’s appeal to his capitalist brethren (Morley’s “Cobden,” p. 74) : “Let us,” he said, “invest part of our property to save the rest from confiscation.” And he further says:

“At one meeting in Manchester one man after another called out’in quick succession, ‘A thousand pounds for me,’ ‘A thousand pounds for me,’ until 60 thousand pounds had been subscribed on the spot. They were spending £10,000 per week. . . . ‘ I am afraid,’ said Cobden, ‘that most of us entered upon the struggle with the belief that we had some

DISTINCT CLASS INTEREST IN THE QUESTION.’ ”

Vince, in his life of Bright, says (p. 28): “The battle of the corn laws was a contention between the middle class and the aristocracy.” How hypocritical the agitation for repealing the Corn Laws was we may gather from the report of the Inspector of factories for 1849, where we learn that wherever the circumstances permitted the manufacturers reduced wages 25 per cent. upon the introduction of Free Trade.

Nearly 65 years have passed since Free Trade was introduced. Mr. Hobhouse tells us that “the 19th. century might be called the Age of Liberalism” (p. 214); and the National Liberal Federation, speaking of the period since 1832, says (“The Work of Liberalism since the Great Reform Act”): “It has been in the main an era of Liberal administration. The Liberal Party has had practically unfettered control of the interests of the country in foreign, colonial, and financial policy.” Yet after all this what is the position of the worker ?

After detailing the high claims made by the pioneers of Free Trade our author says :

“The actual course of events has in large measure disappointed these hopes….. the prospect of a complete and life-long independence for the average workman upon the lines of individual competition, even when supplemented and guarded by the collective bargaining of the Trade Union, appears exceedingly remote. The increase in wages does not appear by any means proportionate to the general growth of wealth.

“There appears no likelihood that the average manual worker will attain to the goal of that full independence covering all the risks of life for self and family, which can alone render the competitive system really adequate to the demands of a civilised conscience. The careful researches of Mr. Booth in London and Mr. Rowntree in York, and of others in country districts, have revealed that a considerable percentage are actually unable to earn a sum of money representing the full cost of the barest physical necessities for an average family.”

Of industrial competition he says : 

“That system holds out no hope of an improvement which shall bring the means of such a healthy and independent existence as should be the birthright of every citizen of a free State, within the grasp of the mass of the people of the United Kingdom.” 

But what is the remedy ? Surely not more Liberalism and Free Trade ! Despite the above admissions of the

FAILURE OF CAPITALISM,

Mr. Hobhouse devotes many pages to attacking what he calls “Mechanical Socialism” and defending the present system of society. He defends it, though his leader, Mr. Lloyd George, told us (Swansea, Oct. 1, 1908): “No one can really honestly defend the present system.” Mr. Hobhouse ignores the great combinations and trusts the workers have to fight by making this statement (p. 99):

“It is possible under a competitive system for rivals to come to an agreement. The more powerful may coerce the weaker, or a number of equals may agree to work together. Thus competition may defeat itself and industry may be marshalled into trusts and other combinations for the private advantage against the public interest. Such combinations, predicted by Karl Marx as the appointed means of dissolving the competitive system,

HAVE BEEN KEPT AT BAY

in this country by Free Trade.”

This is a fitting statement for a capitalist Professor of Sociology to make. Anyone, without propertied interests to defend at all hazards, can see all around him the existence of great combinations and trusts. From the Imperial Tobacco Company to the gigantic Coats Cotton Trust; from the Salt Union Ltd. to the United Alkali Manufacturers, Ltd., they thrive and flourish even under your Free Trade.

One of the leading members of the Free Trade Union (Mr. J. A. Hobson) points out in his work “The Evolution of Modern Capitalism,” that Great Britain is honeycombed with trusts and combines ; and recently the great Birmingham Free Trader, Mr. Arthur Chamberlain, told us that rings and combines were necessary to the capitalist and inevitable even under beloved Free Trade !

A. Cleveland

The Common Market Special Survey: 1. The Background (1962)

From the January 1962 issue of the Socialist Standard

A shiver of apprehension is running through the national press as cabinet ministers and captains of industry set about the task of preparing the public for what to expect if Britain’s application to join the Common Market should be accepted. Mr. Macmillan calls it “a bracing cold shower we shall enter, not a relaxing Turkish bath” and one of the industrial bosses thinks it will rather be “an icicled channel swim at nought degrees Centigrade.” Prophecy is dangerous, but the chances are that within 15 months from now this country will be part of the European Economic Community.

What reasons do the British ruling class put forward for having to join the Common Market? Why should Britain shift the traditional centre of gravity of her economy from the Commonwealth to Europe? Why should she wish to wind up the European Free Trade Area (EFTA) she had only recently been instrumental in creating? And what effects will this have upon the British working class?

Weakened and impoverished by the ravages of World War II, the rump of continental Europe lay prostrate in front of the Iron Curtain, useless to the bloc of Western powers dominated by the United States of America as a profitable market, useless in the game of power politics as a defence against the rival bloc grouped around the Soviet Union. Only an economically healthy Europe would offer reasonable guarantees of safety to the American world of finance and industry. And so from the dust and ashes there arose new life, frantic activity, a giant mesh of scaffolding throughout Western Europe, factories, banks, stores, communications shot up at breakneck speed—financed by a massive programme of American aid and investment. The Marshall Plan "of which the sole condition was that the countries of Europe must band together and agree upon a joint recovery programme.”

British industrialists watched with consternation ultramodern plant swinging into action across the channel. But with both the home market and the Commonwealth, with its established system of preferential duties, crying out for manufactured goods after the shortage and wastage of the war years, profits were still secure in spite of outdated plant and methods.

Powerful vested interests were haunted by the fear of a resurgent Germany, the spectre of Krupp and Thyssen—the giants of the Ruhr and the power behind the expansionist militarism both of Prussia and Nazi Germany. German industry was not to be permitted to swallow all the plums in the new Europe. Markets, capital, labour and raw materials were to be divided fairly between the power groups. By 1953 the European Coal and Steel Community (ECSC) was a going concern comprising the coal and steel industries of Federal Germany, France, Italy and Benelux (Belgium, Netherlands and Luxemburg). The Origins of the Common Market.

There was one weak link; Belgian coal was too expensive. Throughout the mining belt across the south of Belgium mines were shut down and miners were out of work in their thousands. But the Belgian mine owners had been helped over the critical period with massive subsidies from the international High Authority administering ECSC. Capitalism had pulled a new card from its sleeve. For coal and steel, ECSC meant larger markets, bigger production, better exploitation of capital and labour, fewer irksome administrative barriers, discriminations and quotas. Why not extend the idea to the economy as a whole?

By March, 1957, there was signed the Treaty of Rome which launched the six participants in ECSC on the road towards the Common Market. Its object was:

“To permit goods to travel freely without Customs Duties or quota restrictions, throughout the area of the Six and thus to permit manufacturers to invest on the scale that modern technology makes possible and necessary.”

Customs duties between the Six were to be whittled down progressively in three successive phases of four years each. At the same time a uniform external tariff wall was to be erected around the Six. Allowance was made for differences between the Six in terms of industrial development and efficiency or productivity, for differences in wage levels between member countries. It was obvious that the impact of a progressive crumbling of Customs duties would have serious effects on certain industries and even countries. To soften the impact the Six adopted a device successfully tried out by the Benelux countries from the start of their Customs Union almost immediately after the last war—a Compensation Tax. Being flexible, this tax can be used to ensure, in the interest of the ruling class of the Six as a whole, that individual national groups of an industry do not cause too much of a disturbance in any specific field.

Big industry and banking seized the opportunity with both hands; American capital poured into the Six. Displaced Persons, human flotsam, waiting to be employed as cheap labour, were overflowing in German refugee camps. Italy, where starving millions were considered a potential communist threat, had been given a major blood transfusion of U.S. dollars and was starting a massive programme of industrialisation with huge reserves of agricultural labour waiting to be drawn off the land in Southern Italy and fed onto the new industrial treadmill.

Developments were rapid. Before the end of the first four-year period the programme of whittling down of Customs Duties had been exceeded by 18 months. Inter-Common Market tariffs are now 30 per cent. below their 1957 level and may be 50 per cent. down by the end of this year. The process may be completed by 1965 if not before.

In the meantime the British ruling class was taking only a modest interest in the Common Market. How modest will be seen from the fact that that even as late as 1960 British private direct investment within the Six (excluding oil and insurance) amounted to no more than £21 million as compared with £208 million invested in the Sterling Area outside the United Kingdom during the same period. In a good many fields British industry was not even interested in exports of any kind. These were the people who could sell all they could manufacture in the home market behind the cover of a high protective tariff wall and in the expectation that the halcyon days were here to stay. Their plant was being amortized at a comfortable rate and foreign competition could not touch them. To break into the fiercely competitive outside world meant hard work, expense, lower profit margins. Why bother?

But in the Commonwealth things had been happening. Preferential treatment of British goods had disappeared under a great many headings in the Customs Tariffs of Commonwealth countries which are fast building up a market for their products in Europe.

Nonetheless certain Commonwealth countries, notably New Zealand, still depended largely on the British market for their livelihood and raised vociferous objections to any thought of a British commitment with the Six unless their special interests were safeguarded.

Powerful British interests also disliked intensely the possibility of a political entanglement with the Six.

It was all too complicated. Couldn’t the remaining uncommitted countries of Europe (Denmark, Norway, Sweden, Switzerland, Austria, Portugal) be brought into some form of association more to the liking of the British ruling class, without the embarrassment of. political implications and interference with existing Commonwealth trade? Their 97 million people (including the United Kingdom) would not compare with the home market of 170 millions of the Six, but it was better than nothing. And it would strengthen Britain’s hand in any later approaches to the Six. Thus was born the European Free Trade Association (EFTA) or “The Seven.” Finland has since joined making EFTA “The Eight.” Its purpose was to be strictly limited to the progressive reduction of Inter-EFTA Customs Duties and quantitive restrictions.

Now the prospect of an enlarged Common Market of 250 million people or more discriminating against U.S. goods is beginning to alarm the American capitalists. Already pressure groups are at work promoting a direct U.S. participation in the Common Market. This, to quote, the Herter report, “with its highly developed industrial and technological complex and its disciplined workers, would comprise the most efficient workshop in the world” where since 1958 trade among the Six had risen by about 50 per cent. . . .

What is involved in the British application to join the Six, for industry and finance, and what does it mean to the British working class?

If agreement should not be forthcoming, British industry could well find itself faced across the Channel with a fast-expanding, highly efficient and ultramodern competitor of great striking power. Many British manufactured products may disappear from the markets of the world which would entail a major re-alignment of industry. The usual flow of capital from the weak to the strong will be accelerated. The harder it became to export finished goods, the more British capital might have to seek investment abroad for overseas manufacture, albeit in return for smaller profits.

Designed to fit the present requirements of Western capitalist society, the Common Market has, like any other capitalist institution, no permanence. It will be discarded when it ceases to be profitable. To the British worker it reinforces the constant threat for the worker under capitalism of insecurity and unemployment,

Tisserand.

Book review: Flies in the ointment. (1916)

Book Review from the September 1916 issue of the Socialist Standard

The New Protectionism, by J. A. Hobson, London. The Cobden Club, Westminster, and T. Fisher Unwin Ltd., Adelphi Terrace. 6d. Net.

That monumental piece of bluff and fatuity the Paris Economic Conference has been taken seriously, not by the German capitalists—-they are not entirely devoid of intelligence—but by the Free Trade apostles of this country. While almost everybody else has been laughing at the affair as a clumsy attempt to impress the mugs, not of the Germanic nations, but of the “entente” countries, the “economists” of the Cobden Club have been regarding the Conference as a sort of “red light,” and have even been moved in their trepidation to inflict upon an already sufficiently suffering world a 150 pages or so of very serious and solemn consideration of the matter.

That the recommendations of the Conference were ever seriously intended to be carried into effect after the war has been thought hardly worthy of space for discussion in these columns. It will be the wonder of the age if the “Allies” can hang together through all that they have yet to endure before they arrive at the goal of victory, or survive the conflict of interests at the settlement, much less bind up those clashing interests with fiscal bonds and the like. Those interests are by no means made one by the war. It is extremely doubtful, indeed, if those interests are unified even as far as a complete and crushing victory over the Teutonic powers.

Be it said at once that in the brochure under review the author adduces many cogent reasons why the attempt to carry out the recommendations of the Paris Economic Conference would be sheer idiocy. Having said that I have done with that side of the question. If any reader wishes to waste a tanner on those cogent reasons he has my gracious permission to do so, and incidentally he can have my copy for tuppence, with the comment chucked in that “the fool and his money’s soon parted.”

But if the Socialist is not concerned with the question of statesmen making asses of themselves by chewing “New Protectionism” thistles, he generally feels disposed to have a cut at bourgeois economics (!) when opportunity offers, and opportunity offers now.

Mr. Hobson opens thus :

“The policy of Free Trade is based upon a reasoned belief that all commerce is an exchange between the goods or services of one person and those of another, this exchange being usually effected by two monetary transactions an act of sale and act of purchase. both parties in such commerce are gainers from it: and their gains tend to be equal.”

Our author having firmly based his creed on the unshakable quagmire of an economic fallacy, proceeds to enlarge upon a “series of separatist fallacies,” of which

“the second is the separation of the interests of the seller from those of the buyer, and the false assertion that the interests of the former are, or ought to be, superior.”

If Free Trade is based upon the first-mentioned belief, then the Free Traders had better shut up shop, for the Protectionists have all the best of the argument. An exchange may be “two monetary transactions—an act of sale and an act of purchase” but there is a vast difference between the two. The seller of a commodity realizes profit, the buyer does not. The commodity is not produced for consumption, but for profit. This profit can only be realized by sale. The seller, then, is simply completing the process which finds its volition in the motive for all capitalist activity—the incentive of gain ; the lust for profit. Therefore, it is not true that both parties are equal gainers by exchange, and under the system the interest of the seller is the paramount interest.

As a matter of fact, of course, it is not at all necessary to believe that both parties concerned in an exchange benefit equally from it in order to become an advocate of Free Trade, and it is mere moonshine to say that the policy of Free Trade is based upon such a belief. The Free Trader who counts—the Free Trader among the ruling class—recognises the paramountcy of his interets as a seller, since he knows that in each cycle of his industrial operations—in which field the vast bulk of both his buying selling is done—he sells more than he buys, and this difference between what he buys and what he sells is the sole incentive of his buying and seeing at all.

He starts by buying raw material and labour-power, and he ends by selling the product of the combination of the two. And always, except in the comparatively rare instances where he has made a sad muddle of things, the amount of his sales exceed the amount of his purchases, else where does his profit come in ?

Free Trade is mainly the policy of the manufacturer who hopes to sell in foreign markets, and for these reasons : If he has to pay a duty on his raw materials he cannot recover it in the world market, hence he is handicapped as a seller ; i.e., he must either sell for more and consequently sell less, or he must sell for the same as has foreign competitors and himself shoulder the duty. In either case he realizes less profit. The second reason is that if his wage-workers have to pay a duty on their necessaries of life he, the employer, will have to pay more for their labour-power, and again when he sells his commodity he realizes less profit.

And now mark the working of the mind of the bourgeois Protectionist. He usually is producing for the home market. If he has to pay more for his raw materials because of a tariff, be can get that back in the protected home market, while if he has to pay more for his labour-power because of the tariff on his wage-slaves’ necessaries of subsistence, he calculates that the higher price and wider market Protection enables his commodities to enjoy will more than counterbalance that disadvantage.

The underlying motives, therefore, of both the Free Trade and the Protectionist policies are not any concern for the equality or inequality of benefit arising from exchange, but the desire to have established that system best suited to the economic of the individuals holding the respective views. And it may be said that the tendency is to protect the home market when that market is of greater importance than the world market, and to resort to Free Trade as the export trade is developed. In view of this we may expect to see a revivifying of the Protectionist policy as the development of the manufacture of the more backward countries brings about a relative restriction of the foreign market for every country.

In close connection with this phase of the question “Free Trade versus Protection” Mr. Hobson may be quoted again. He says on page 8 :

“If the Bradford weaver gets Protection and nobody else, he stands to gain. But if all other British trades, local and national, engaged in making articles he needs in his trade—e.g., wool, coal, machinery, dyes, etc.—or articles of food, clothing, furniture, on which he spends his wages, also get Protection, each duty to protect those other trades filches from him a bit of the gain he stood to make if the Bradford woollen trade were alone protected. A general tariff protecting all British trades equally would thus be found to make so many deductions from the value of the special Protection enjoyed by the woollen trade as to convert it from a gain into a loss. The higher prices of woollens which his Protection enabled him to get would be outweighed by the added higher prices of the various article required for use in his trade and for his private consumption.”

This, of course, is incorrect, as is easily demonstrated. Let us suppose “a general tariff protecting all British trades equally to the tune of, shall we say, 10 per cent. Our Bradford weaver buys “wool, coal, machinery, dyes, etc.” (much of which being home produce, he would not have to pay any duty on) value say, £100 prior to the tariff. He then purchases labour-power of the pre-tariff value of say £50. Even if we assume that the whole of the material had been subject to the tariff, and the labour-power had been produced entirely upon duty-bearing substance, the Bradford wearer would hare to pay on account of the tariff 10 per cent. on only the amount of his outlay, £150. But when he came to sell his commodity in the home market he would find his foreign competitor penalised to the extent of 10 per cent. of the full value of the commodity, which would he, say, £200. So against an penalty of 10 per cent. on £150 the Bradford weaver finds he has increased opportunities (so long as he sells in the protected market), in the way of increased sales and higher prices, equal to 10 per cent. on £200. “His private consumption” is by no means sufficient to materially affect this argument.

Again, on page 6, our author talks through his hat. He says of the Protectionist :

“He makes his separate appeal to the man as producer, tells him that selling is more important than buying, and that the money he receives is more important than what he can buy with it.

It is through consumption that the co-operative nature and value of commerce is realized.”

The crux of the whole matter is, who does the Protectionist appeal to, or, for that matter, who does the Cobdenite appeal to ? If to the capitalist, then it has already been shown that the capitalist is far more of a producer (in the controlling, not the operative sense) than consumer, and that it is to production that he owes all he possesses, which he realizes through the act of selling. It is logical, therefore to appeal to the capitalist as a producer, and both the Protectionist and the Free Trader are found to do so in the last analysis. Even Mr. Hobson does so when he says, “the higher prices . . which his Protection enabled him to get would be outweighed by the added higher prices of the various articles required for use in his trade.” On the other hand, if the appeal is to the workers, then it is about as logical to appeal to him as a consumer as it would he to try to interest a horse in the cost of his forage. Mr. Hobson assents to this when he states that the higher price of the worker’s “food, clothing, furniture, etc.,” “filches . . a bit of the gain” from the Bradford weaver.

There are plenty of other fallacies in the book under review, but I have room only to deal with one or two more. Mr. Hobscn says on page 4 that

“The notion that the expansion of foreign markets obtained within the last two decades by German or American traders is a corresponding loss to British traders is sheer nonsense. To a large extent those markets were “created” by the special economic and commercial activities of the German or American trader. For the rest, an enlargement of our foreign markets which, in default of German or American competition, might have taken place, would have involved a diminution of our home markets.”

What a conception of the capacity of the commodities market ! And what a conception of the modern capitalist power for production ! Mr. Hobson says it is a falsehood to represent the commercial competition between two nations as “a struggle between two nations for a limited amount of profitable foreign market.” He declares that “There is no such absolute limit to quantity of foreign market.” Yet our author admits that there is competition. It would be interesting to hear Mr. Hobson’s explanation of what that “commercial competition” is for, and how it arises. Nobody competes for that which is (in the practical sense) unlimited. It is limitation which is the very foundation of competition.

And then mark the ludicrous suggestion that it is productive capacity that is limited in that statement, “an enlargement of our foreign markets . . . would have involved a diminution of our home markets.” The army of unemployed means nothing to Mr. Hobson : the factories working short time or closed down are without significance to him ; the periodical crises, when the warehouses are choked with goods which can find no outlet in any market, at home or abroad, make no impression on his mind. One can go on producing to any extent, in our author’s view, and the problem of markets will solve itself. If the market does not exist you simply “create” it. The only danger is that, if you “create” much “foreign market” the home market will have to go short because capitalist production is so inelastic that it cannot respond to the call for expansion.

A. E. Jacomb

Fiscal fatuity. (1908)

From the September 1908 issue of the Socialist Standard

Mr. Chiozza Money is a ‘cute man ; but he nods at least as often as Homer. Just now he is engaged in making “One Hundred Points for Free Trade,” or rather, one hundred points against Protection, in the Daily News. This is one of them :

“The Protectionist theory is that imports, especially imports of manufactures, cause want, unemployment, and pauperism.

Well, every year India imports large quantities of manufactured goods, and nearly all of them are imported from the United Kingdom.”

***

Mr. Money might have found—it would have been a difficult job, but he might have found—a happier example. In India the people die literally like flies from “want, unemployment, and pauperism” and their results. The onus is on the Free Trader to explain the absolute unredeemed impotency of Free Trade in “our great dependency.”

***

The Protectionist is of course in no better case. He has to explain why “want, unemployment and pauperism” are rampant in every industrial country where his pet nostrum is in operation. Protectionist and Free Trader are alike unable to face the facts. They have to resort to all sorts of mean and pitiable dodges to escape facing facts. From a working-class standpoint there isn’t the worth of a tinker’s anathema between them or their precious systems.

***

Poverty is the result of certain definitely ascertained causes. Fiscal schemes do not remotely affect those causes. The workers are poor because they have no control of the product of their labour and are, therefore, robbed of the great proportion of it. Free Trade or Protection may, in certain cases and under certain conditions, result in a particular trade or trades receiving a fillip. To that extent there might be more work available. But that would also necessarily mean more robbery. And the workers are poor because they are robbed.

***

Besides, the fillip must in the nature of capitalist things die down. Supply would overtake and outstrip available demand. There is not a single commodity in general requisition that the present machinery of production could not satisfy the effective demand for several times (often hundreds of times) over. Given the fillip and competitive machinery would be working at breakneck speed to be first in the market with the goods. Result : overproduction, slump, unemployment, starvation and the miseries necessarily attendant thereon.

***

The process is characteristic of free trade and protected countries indifferently. If the worker is employed he is robbed. That is the unalterable condition of his employment. He must make a profit for his master. If he is not employed he starves. In either case he is no more than a pawn in the competitive game. He is dependent upon the fluctuations of the market—upon the employer who works him at top speed until he has produced too much, and then throws him off until the surplus is exhausted.

***

The waste, necessarily the accompaniment of this competitive game, is only obviated under capitalism through monopoly. With one source of supply the output may be regulated to the demand. But Free Trader and Protectionist alike shriek (publicly) against monopoly, and howl dismally against waste. They are just mean dodgers or abnormal ignoramuses—they want to eat their cake and have it. The trust (monopoly) is the perfection of production. The trust stage is inevitable. It will produce most economically. It will save labour. It will mean more unemployment. And it is inevitable—Free Trade or Protection notwithstanding.

***

Mr. Money’s note has lured me into an article. I am sorry ; but I am a victim of circumstances. I intended no more than a par. But the fiscal folly of the Free Trade Moneys and the Zollverein Wilsons always cause me to curse privately and slam publicly. They are so dam silly ! The whole point is that “want and unemployment and pauperism” are inevitable under capitalism ; that although Free Trade or Protection may conceivably give an impetus to a certain trade it cannot absorb the available labour, and even if it could, labour would still be robbed ; that there is no explanation of the poverty problem other than that given by the Socialist; that there is no solution other than that offered by the Socialist.

***

The working class of every capitalist country in the world is in a state of chronic “want, unemployment, and pauperism” because it does not own the wealth it alone produces. It doesn’t own the wealth because the land and machinery of production are owned by the capitalist class. It never will own its product until it owns and controls this land and machinery. And it never will own and control the land and machinery until it thoroughly understands its own position and the conditions of change, and has organised its forces for the specific object of effecting that change.

***

The work of the Socialist Party as against Tariff Reformer, Social Reformer, Fiscal Laissez Faireian, or what not, is, therefore, the education and organisation of the working class for the overthrow of capitalism through the capture of the powers of government in order to secure the product of labour from being annexed by the capitalist class. Virtually the working class is in possession of the machinery of production since the whole process from top to bottom is in working-class hands. The workers now require to assert their possession and secure it, and at the same time the result of their toil, by the control of the fighting arms through political conquest. Simply that.

Alegra.

Cuttings and Critiques. (1908)

From the June 1908 issue of the Socialist Standard

A Social-Democratic “Victory.”

____________

In reporting the return to the Barking District Council of Mr. Edwards of the S.D.P., Justice claimed that he ran as a straight Socialist. Below we reproduce a “revolutionary” appeal issued by Mr. Edwards :—

To the Electors of the West Ward.

____________

Vote For A Man.

Who will support your interests as a working man, not a man who, if you ask him for a job, should say “Aye, mon, let’s look at your honds?”

What price

Working or a gasholder at 6d. per hour

in all winds and weathers. Is this the type of a man who supporting Contractors and others in the undercurrent which is now so prevalent on the Council, the man for the West Ward ? Show your disgust by

Voting For 

Edwards.

* * *

The Tariff Reform propaganda is certainly compelling the Liberals to make some very interesting admissions, in their efforts to show that the existing unemployment and poverty are not due to that Free Trade which they claim has brought so much prosperity to this country. Thus in the House of Commons on April 14th Mr. Lloyd George declared that we are to-day producing the same quantity of hops as hitherto, but out of a smaller acreage—due to improved methods of production. Those engaged in the industry are suffering, he said, because of these improved methods and machinery, which have enabled a great saving of labour to be effected. In a similar strain the Daily Chronicle wrote in connection with the Wolverhampton bye-election. Local unemployment, it declared, was to some extent due to improved machinery and machine tools. The output is greater than ever, but owing to methods of standardisation, the cost of production is decreased, and less labour is required.

* * *

The manufacturers are doing well, it added. Of course they are, and always will so long as they own the machinery which the workers improve and operate. No fiscal arrangements or rearrangements under capitalism will affect the workers’ position.

* * *

Some idea of the extent to which that “Peasants’ Charter,” otherwise the Small Holdings Act, will “solve the land problem” may be gathered from the reports in the Liberal Press of the recent floods. Some recently laid down allotment land in Upper Caversham, wrote the Daily News on April 30th, is submerged to a considerable depth, which means a heavy loss to those working men who have rented the ground and who have already planted for the season. It also reported that allotment holders around Towcaster and in other parts had suffered considerably.

* * *

And yet some folk still continue to swear by these pills for the earthquake.

* * *

According to the Anglo-Indian Temperance Association, the revenue from intoxicants in India continues to rise, having reached £6,510,000 in 1907. In 1875 it was £1,755,000. This of course has taken place side by side with an increase in the number of conversions to Christianity.

* * *

In reply to a correspondent who asserted (inter alia) that everybody knew the I.L.P. was a Socialist Party, the Editor of the Western Clarion (Vancouver), in the issue of that paper for April 25th, 1908, writes as follows :—

“He is mistaken in stating that we all know the I.L.P. Is a Socialist Party. We all don’t know that a party is a Socialist Party which has for its leading lights and parliamentary representatives men who, like Ramsay MacDonald and Shackleton, favour child-labour and advocate the lowering of the school age to thirteen years so that the child-slaves may be available to the profit mills of capitalism at as early an age as possible; or men who, like Henderson, oppose the eight-hour law ; or who condone a rifle diet for hungry strikers, like the whole precious bunch of them. Socialists ? Why, no Whig or Tory could serve capitalism better.”

* * *

The reply is commended to the careful attention of the Western Clarion’s English namesake. It is not expected that the organ of the house of Blatchford will enthusiastically endorse the views so definitely expressed in the Vancouver journal, but it does not follow therefore that the views are not true. Rather the contrary.

* * *

The recent election at Dundee provides yet another illustration of the compromising tactics of the “Labour” Party. The manner in which the officials of the Labour Party acted was directly opposed to the “Labour” nominee. It is well known that Mr. James Ramsay MacDonald went down to Manchester to interview Mr. Winston S. Churchill, and assured the Liberal Cabinet Minister that no opposition would be forthcoming from the Labour Party at Dundee. Is this the reason why Mr. MacDonald and the senior member for Dundee, Alex. Wilkie, did not speak on Mr. G. Stuart’s behalf and did not send a message to him ? What a curious lot ! And what “Independence ” !

Cooking the Books: The King of Tariffs (2025)

The Cooking The Books column from the May 2025 issue of the Socialist Standard

‘Trump often cites the “gilded age” of William McKinley, the late 19th-century president, who imposed tariffs at an average rate of 50 percent to protect the domestic farming sector from foreign competition’ (Times, 4 April).

Actually, it was the manufacturing sector that McKinley wanted to protect. When he was a congressman for Ohio he drew up the Tariff Act of 1890 that came to be known as the McKinley Tariff. Trump calls him the ‘Tariff King’, a crown he himself clearly wants to wear.

In 1888, with the campaign for tariffs in America in full swing, Engels published an English translation, with his introduction, of a talk on free trade that Marx had given in French in Brussels in 1848. Engels quoted Marx as saying (in chapter 31 of Capital) that historically protectionism had been ‘an artificial means of manufacturing manufacturers’. In his talk Marx criticised free trade too but came out in favour of it because it would hasten the development of capitalism and so bring on the final confrontation between the working class and the capitalist class. As he put it:

‘The free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade’.

Engels’s introduction provided a useful historical survey of protectionism — including which sections of the propertied classes in different countries had benefited from it and which had not at various times — and some background on what led to the McKinley Tariff, but also made some points about the effect of tariffs on different sectors of capitalist business which are still relevant today.

One difference he mentioned was between those sectors which relied on imported materials and those which didn’t. Manufacturers who obtained within the country the materials to transform into what they sold welcomed a tariff on imports of their product as protecting them from outside competition. On the other hand, those manufacturers who relied on imported materials did not want a tariff on them as this would increase the cost of producing their product. Nor did importers want tariffs generally.

This was seen today in the immediate reaction to Trump’s 2 April ‘Liberation Day’ on Wall Street, where share prices reflect traders’ views on the future profit prospects of the quoted firms. Shares in Apple whose smartphones are manufactured in Asia fell by 9 percent and ‘Big multinational consumer groups were heavily in the red, reeling from tariffs on Asian production hubs. Nike slumped 14 per cent’.

Exporters are not keen on tariffs either as their products are likely to be targets of any retaliatory action taken by other countries. America doesn’t export much manufactured stuff (except weapons of war and pharmaceuticals). Apart from oil and gas, its main exports are agricultural products. Sure enough, this is what China’s retaliatory tariffs, announced two days later, were aimed at. ‘The latest measures are likely to have the most impact on US agricultural exports, including soya beans, wheat and corn’ (Financial Times, 4 April).

In short, not all its business sectors benefit when a country imposes tariffs. America today is no exception. Some capitalist businesses are in favour of Trump’s policy but some will be lobbying for exemptions, even campaigning against him. Not that there is any guarantee that his protectionism will succeed in ‘manufacturing manufacturers’ in America, or, rather, in raising them from the dead.

In any event, as Engels noted:

‘The question of Free Trade or Protection moves entirely within the bounds of the present system of capitalist production, and has, therefore, no direct interest for us socialists who want to do away with that system.’

McKinley was elected president in 1896 but was assassinated by an anarchist in 1901.

The Lies of Liberalism. A Record of False Pretence and Low Cunning. (1910)

From the August 1910 issue of the Socialist Standard

Without a Blush.

In the course of his Budget speech. Mr. Lloyd George dwelt upon the wonderful extent of industry and trade. He indulged in the usual lies about working-class prosperity and foreshadowed “the better time coming,” in the following words :

“The commercial world everywhere is in better heart. There is more enterprise and everything makes the prospect much brighter. I am told, on authority, I cannot doubt, that we shall probably see a greater volume of trade this year and next than has ever been witnessed in the history of this country . . . All indications are that this year’s trade will be good, that next year’s trade will be better, that the people will be prosperous and that therefore the revenue will show an expansion.”

Will the people be prosperous ? If by the “people” is meant the workers we deny it and submit she following lesson from the past (provided by the Liberals themselves) as evidence in support of our point of view.

In the leading article of the Daily Chronicle (amongst other papers) for June 6th, 1903, we were told :

“Opportunely there are published this morning two official returns of great interest and importance with regard to British Trade. . . The figures tell a tale both absolutely and relatively of great prosperity. . . . They show that the whole volume of British Trade has increased from 764 millions sterling in 1898 to 877 in 1902 . . . we have such evidence before us that we are doing very well as we are.”

In the very same issue appears a report of the now famous speech delivered on the previous day in the City Hall, Perth, by Sir Henry Campbell Bannerman, who said :

“We know that there is about 30% of our population underfed, on the verge of hunger. . . The condition of the people is serious enough under Free Trade ; it is a question which haunts us, and surely the fact that about 30% of the population in living with the grip of perpetual poverty upon it, is and ought to be a sufficient answer to the Prime Minister.”

Our Splendid Civilisation.

It was also in that “boom” year that Mr. Winston Churchill made his speech at Edinburgh, during which he said :

“I have often asked myself whether our splendid civilisation really conferred blessings on all classes. Is it true to say that the poorest man in Scotland is not any happier than poorest Hottentot or the poorest Eskimo? I am inclined to think that he is not any happier but perhaps more miserable. He is homeless in the heart of great cities ; such as never was never seen on earth before and he suffers the privations of the savage with the nerves of civilised man.

“To compare the life and lot of the African aboriginal—secure in his abyss of contented degradation, rich in that he lacks everything and wants nothing—with the long nightmare of worry and privation, of dirt and gloom and squalor, lit only by gleams of torturing knowledge and tantalizing hope, which constitutes the lives of so many poor people in England and Scotland, is to feel the ground tremble underfoot.”

Despite the widespread poverty, the Liberal Party are very active just now, in claiming that unemployment is rapidly declining and that the conditions of life for all are improving because of the advance of commerce. But let the reader reflect on the facts given above showing the existence of terrible poverty at the same time as an unequalled increase in the amount of wealth produced and it will then be clearly seen that the claims of Liberalism are fraudulent.

A Fraudulent Claim Exposed.

We are continually told that the recent legislation of the Liberals is beneficial to the workers. An examination of the chief items will show how groundless is this statement.

The Board of Trade Labour Exchanges (opened February 1st, 1910) have been hailed with delight in many quarters. Below we give the returns published in the April, May and June issues of the “Board of Trade Labour Gazette.” It should be understood that the number of applicants practically represents different persons, because renewals are not again counted.

During	No. of applications for work	No. of vacancies filled
February	216,813	12,628
March	126,119	20,395
April	116,523	23,858
May	100,392	24,025
	559,847	80,906

These figures show how the Liberals have lied about unemployment and the influence of Labour Bureaux. What a fraud ! 80,906 jobs and 559,847 applications for them ! No wonder the number of applicants fell after the first month, seeing how few jobs could be had through them.

How greatly these Exchanges are opposed to the interests of the working class was indicated by recent instances in which they provided strike-breakers. One or two of these cases only are dealt with here, owing to this being an article and not a pamphlet.

Strike-smashing Up to Date.

A London firm of cabinetmakers recently refused to pay the union rate to their workmen. The men were called out by their union but the masters applied to the Labour Exchange for “hands.” (It is true that the regulations require all applicants to be told if a strike is on at the firm applying. But the regulations only exist on paper.) The Exchange wrote the firm asking whether a strike was proceeding as they had been informed so by the union. But the very morning that the letter arrived, and before a reply was sent, men arrived from the Labour Exchange and were taken on.

In June a strike arose at Newport Docks, and Messrs. Houlder Bros, had the good fortune to be supplied with strike smashers by both the Labour Exchange and Mr. Collinson’s Free Labour Association ! Down at Napsbury Pauper Lunatic Asylum, another wing is being built to accommodate the increasing number of workers whom the present system mentally cripples. The contractors for the work sought, in true capitalist spirit, to wring more unpaid labour out of the labourers, paying them 5½d. per hour. . The toilers, directly provoked by this starvation rate, remonstrated on June 15th, and were thereupon paid off. Before many hours had passed strikebreakers arrived from a London Labour Exchange, and supplanted the men on strike.

According to their own account, no mention of there being a strike down at Napsbury was made to the strikebreakers.

Another motive our Liberal capitalists had in establishing these Labour Exchanges. A quotation from Leaflet No. 16 (“Rough on Rates”) issued by their Budget League, illustrates this :

“These Labour Exchanges will contain accurate lists of unemployed men and women. By means of telephone a man will be able to find out if there is a job for him in a distant town without going on tramp to the town itself. This means that casual wards maintained by the ratepayers’ money will fall into disuse and large sums of public money will be saved.”

Bearing in mind that it is the property owners and not the workers who pay the rates, we can see whose interests this measure protects.

The same reason causes them to favour unemployment insurance, as the following from the pamphlet quoted above tells us :

“The principle of insurance is that you pay money when times are good and receive it back when times are bad (!) This scheme means therefore that during periods of depression, money will be put into circulation, thousands of families kept off the rates,” etc., etc.

A Hair of the Dog that Bit Him.

The Road Development Bill has been produced to lessen unemployment, we are informed. The real position is that commercial progress accompanied by the revolution in modes of transit from the horse-drawn vehicle to the motor, makes necessary to the capitalists the laying of roads more suitable for the heavier traffic of commerce and the pleasure cars of the idle rich.

The method is to have roads that will not need the constant repairing that the present ones do, and the alterations are brought under the control of the national executive of the capitalist class to ensure more economic maintenance, and results in less work being needed to keep the roads in good condition. To quote again from that Liberal bill:

“Improvements will then be effected at the charge of the Treasury, which would otherwise necessarily add to the rates of certain districts, and special attention will be devoted to laying down a more durable and less dusty surface to our highway. This again will relieve local rates.”

Here the old lesson is recalled, that economies effected under capitalism increase unemployment.

After the report of the Royal Commission on Home Work, the Trade Boards Act was passed, setting up minimum wages boards. Hence the cry of the Liberals : “Look what we have done for Labour !” They point out quite jubilantly, that this Act has been welcomed by many of the largest employers !

What actually results from this measure is the alteration of the methods under which exploitation is carried on. Large employers find it less profitable to employ home workers than before. They bring young and more energetic workers into their factories, where the latest wages saving machinery and “speeding up” methods are introduced under carefully adjusted systems of division of labour. The small manufacturer is forced out because of the advantage of the large factory with the big purse behind it. The older workers, who did manage to scrape along by taking work and slaving in their “homes” instead of in the factory, now find it impossible to get work. Thus on every hand these measures prove detrimental to our class owing to wealth being produced under the new methods with fewer workers than before. The larger output for less wages means accentuation of poverty all along the line. The Singer Sewing Machine Co. issued to clothing manufacturers in the North of England, a circular on “The Wholesale Clothing Trade and Labour-Saving Machinery,” drawing attention to an exhibition at Leeds of many wonderful new machines. An extract from it runs :

“The display has already been visited by large numbers of the clothing manufacturers of Yorkshire and Lancashire and more distant parts, and readers interested in the manufacture of clothing may be recommended to learn by a personal visit and inspection, what the new methods and these improved machines may mean to them, especially in view of the now Trade Boards Act which is now coming into operation.”

The Housing and Town Planning Act is also instanced by the Liberals as beneficial legislation and it therefore calls for a few words to show its essentially capitalistic character.

The trend of commercial development is to need wider streets and more luxurious surroundings for the emporiums of the capitalist class. Consequently under the above, as under other housing acts, the workers are driven further away from the main thoroughfares, slums are abolished in one place merely to arise elsewhere. 

The rents of the buildings erected on the sites of the slums (to yield greater profit to the property owners) are generally higher, and the workers, unable to pay more rent, are forced to turn to other quarters, and thus slumdom becomes intensified. In the model dwellings erected by “ten per cent, philanthropy” associations and municipalities, severe strictures are often made as to the number of persons and children per room. This leads the evicted of the slums to resort to worse tenements on account of their lack of resources and therefore the workers are made more uncomfortable than ever. This is the logical result of housing reform under capitalism. Most of the reforms touched upon in this article exist in Germany. Labour Bureaux, Unemployment and Invalidity Insurance, Housing Reforms—all have flourished for some time past over there, yet the Liberal Press and politicians are telling us that the condition of the workers is worse than here. So much for their “blessed” reforms.

We still hear the Liberals repeating the old lie—Free Trade means security for the worker. We have shown from the returns of their own Labour Exchanges how prevalent unemployment is under capitalism. Yet this unemployment exists in spite of the fact that more people emigrated from and fewer immigrated into Great Britain last year than for many years past. The figures in the June issue of the “Board of Trade Labour Gazette” relating to emigration from Great Britain and immigration into Great Britain to and from countries beyond Europe are :

	1909	1908
Emigration	474,374	386,411
Immigration	261,325	342,922

The brutal conditions imposed upon the workers by the employing class, Liberal and Tory alike, force them to leave the land of their birth, to scour the world in search of a job. They leave Great Britain, where unemployment, insecurity of life, and poverty press upon them, to face the same old “problem” thousands of miles away. It’s the old vain hops of expecting to do better in a strange land. More than half the emigrants went to America. The poverty of the workers there was depicted in the May issue of the Socialist Standard.

The Liberal papers have been filling pages with glowing accounts of the fine opportunities supposed to be awaiting the workers in the colonies, with special reference to Canada, where the workers (they say) are welcomed with open arms. Earl Grey, on his recent visit to this country, has been telling the same tale. How fraudulent this emigration campaign is may be appreciated by noticing the fact that on March 10th, 1910 the Canadian Government issued a new notice making entry into the country more difficult than ever. The new rules, while making more strict the medical and civil examination, demand that emigrants should be possessed of from 25 to 50 dollars per head (“their absolute property”) according to the time of the year. Surely if they were really pining for more wags-slaves in Canada they would not impose these onerous conditions. Since the new regulations were made scores of British workers have been sent back to this country. The great miners’ strike at Glace Bay and Spring Hill should show how real the class struggle is in Canada.

Concerning Australia, we have the testimony of social reformers (Mr. Ben Tillett and Mr. Tom Mann, for example) who on returning from there, told of the fierce struggle to live out there in spite Labour Ministries, wages boards, compulsory arbitration, and many other reforms that misled workers are advocating here. The strike of miners at Newcastle and Broken Hill, of the State employed Sydney trainwaymen (to mention only a few) serve to illustrate the fact that the worker who emigrates merely exchanges misery in one place for misery elsewhere. The May No. of the “Board of Trade Gazette” states that unemployment is rife in many leading industries “down under.” “United South Africa” offers little prospect for the worker. There the black slave has supplanted the yellow one, and the white slave is not required because the colored is cheaper.

The policy of the Liberal Party is made up of measures all quite as fraudulent as those we have criticised. Throughout their history they have been the consistent enemies of the working class, just as much as the Tory party. To-day both parties are crying “reform.” This eagerness of the capitalist class to pass reforms sheds light upon the real nature of reform under capitalism. Reforms are favoured by the ruling class for two reasons: firstly, because their immediate material interests are thereby served, and secondly, because they can be used to deceive workingmen and induce them to support capitalist parties. “The Repeal of the Corn Laws” was passed for capitalist ends, yet it was used to rally to the side of the Liberal Party, millions of workingmen. Richard Cobden said:

“The great capitalist class formed an excellent basis for the Free Trade Movement, for they had inexhaustible purses which they opened freely in a contest where not only their pecuniary interests, but their pride as an order was at stake.” (Morley’s “Life of Cobden.”)

The evolution of the present system proceeds faster than the enacting of reform, and even any slight benefit going to the workers is soon more than cancelled by the operations of capitalist development. The working class must learn the simple lesson that while one class own the means of producing the necessaries of life, the rest of society is enslaved to that class. The Liberal and Tory parties alike stand for the maintenance of capitalism, and must therefore be opposed by us. The members of the working class must join the proletariat army fighting for political control: the power required in order that those things necessary for producing wealth may become the common heritage of all —be owned in common and administered in the interest of ALL. They must come into the fireing line and usher in a bright and joyful future for themselves and the race that is to be.

Adolph Kohn