Material World: A history of inequality (2025)

The Material World Column from the November 2025 issue of the Socialist Standard

Thomas Piketty is an academic who specialises in the study of economic inequality and has written a number of books on the subject, the most well-known of which is the 700-page tome Capital in the Twenty-First Century (2013), which we reviewed in 2014. The most recent is A Brief History of Equality which first came out in French in 2021. Based on historical records such as the archives of legacies, property transactions and tax returns, Piketty identifies a trend since the beginning of the 19th century towards less inequality in wealth ownership, income, and access to education, health care and better-paid jobs. Describing himself as a socialist but in the gradualist, reformist tradition, he believes this can continue and lead to ‘a systemic transformation of capitalism’.

On wealth ownership, he takes as a measure of inequality the proportion of wealth owned by the top one percent compared with that of the bottom 50 percent. The figures for all forms of property are:

‘The wealthiest 1 percent held about 45 percent of total property in France in 1810, and about 55 percent of the total in 1910 …. Then, in the course of the twentieth century, we observe a very strong deconcentration of fortunes: in the whole of France, the richest 1 percent’s share fell from 55 percent in 1914 to less than 20 percent at the beginning of the 1980s, before beginning a slow increase; in 2020, that share was nearly 25 percent’.

But ‘this did not benefit much the poorest 50 percent, whose share rose from 2 percent in 1910 to 6 percent in 2020’ and ‘the richest 1 percent’s share of total private property is currently two times smaller than it was a century ago, but it still remains on the order of five times larger than the share held by the poorest 50 percent’.

The beneficiaries have been the middle 40 percent between the top 10 percent and the bottom 50 percent who Piketty calls the ‘patrimonial middle class’. Their wealth he finds is ‘held mainly in housing’. In fact, the monetary value of housing represents about half of that of all privately-owned wealth. The figures for the ownership of all wealth are interesting but the relevant one for socialists is the one for the ownership of means of production. Piketty usefully defines means of production as ‘all the goods necessary to produce other goods and services’ (‘agricultural land and equipment, factories and machinery, offices and computers, shops and restaurants, salary advances and working capital’). He doesn’t produce figures for this but says that ownership of these is more concentrated than for all wealth. But there is a table which shows that:

‘In France in 2020 (as in all countries for which such data are available), small fortunes are composed principally of cash and bank deposits, middle-sized fortunes of real estate, and large fortunes of financial assets (especially stocks)’.

It cannot be denied that the middle 40 percent — the vast majority of whom are members of the working class properly defined — have benefited, but this doesn’t mean that this group is not dependent, like the rest of the working class in the bottom 50 percent, on having to sell their ability to work in order to buy what they need to live. If they lose their job, they can survive for longer before they become destitute, perhaps a year or so after selling their house. But it does mean that we socialists should be careful when we say the working class is ‘propertyless’. We don’t mean that they literally own nothing but that they don’t own means of production.

There has also been a reduction in inequality of access to education and health care. But this can’t be seen as anti-capitalist, as a better educated and more healthy workforce became necessary as production methods became more complex. As Piketty himself points out:

‘During the second Industrial Revolution [chemicals, electricity, the car industry, household goods], it became essential that an increasingly large part of the labour force be capable of mastering manufacturing processes that required technical and digital education, and the ability to understand detailed equipment manuals’.

Nor is the lessening of discrimination over job opportunities for women and minorities incompatible with capitalism. Capitalism could cope with the abolition of discrimination and even benefit from it by being able to draw on a wider pool of trainable and competent workers.

As a gradualist, Piketty would like to see what he calls ‘the march towards equality’ continue and completely ‘transform capitalism’. Besides steep taxes on wealth and inheritance, he envisages changing company law to allow for more employee participation in decision-making and for a proportion of profits to be set aside for spending to benefit workers. Neither of these will change the workings of capitalism as an economic system which imposes on those who make decisions about production that the priority be making a profit. Widening the circle of those who make such decisions won’t alter this; even worker cooperatives have to obey capitalism’s basic economic law of ‘no profit, no production’. And, of course, from time to time companies go bust and there are no profits to set aside.

He also proposes a scheme to give everyone at age 25 a minimum inheritance equal to 60 percent of average wealth per adult (which is France in 2020 would have been about 120,000 euros, or about £105,000; more today of course). The aim, he says, would be to ‘increase the negotiating power of everyone who owns almost nothing (that is, about half the population)’:

‘Recipients could reject certain job offers, buy an apartment, engage in a personal project, or create a small business. This freedom, which is certain to delight some, may well frighten employers and property owners’.

Which, apart from the cost, is precisely why it will never happen; it would undermine the wages system by putting workers in a stronger bargaining position with employers and enable them to extract a higher wage, meaning less profits. It is rather surprising that anyone should seriously imagine that the capitalist state could be made to give half the working class a lump sum of at least £105k. In any event, such a redistribution of wealth would not affect the unequal ownership of means of production.

In short, the trend since 1800 towards less inequality has not undermined the basis of capitalism. Even less has it been an ongoing slow, gradual transition towards socialism. Not that socialism is a society with a more equal distribution of wealth. Its basis is the common ownership of the means of production which will allow everyone access on equal terms to education, health care, work and what they need to live.

Adam Buick

Letter From Europe: Mitterrand clamps down (1982)

The Letter From Europe Column from the August 1982 issue of the Socialist Standard

It had to happen sooner or later. The attempt by Mitterrand's PS/PC government to revive the economy and reduce unemployment in France by giving people more money to spend—increasing “popular consumption" as it was called—just couldn't last. Since capitalism is a system which cannot be controlled or manipulated by governments and since most of the money to finance the social reforms in question came straight off the printing press, what happened was inevitable: the general price level in France rose, and at a rate faster than in other countries, leading to a fall-off in exports and a record balance of payments deficit which in turn made a devaluation of the franc inevitable. The effect on employment, on the other hand, was minimal: sales of consumer goods picked up for a while but the number of unemployed continued to grow, by nearly 16 per cent since Mitterrand came to power, passing the 2 million mark in October.

Exactly a year ago the Socialist Standard, analysing the economic policy of the then brand new PS/PC government, wrote:

It will fail completely and within a year or so they will be faced with growing working class discontent over persisting unemployment and rising prices which they will not be able to satisfy, since the continuing crisis will force them to recognise that under capitalism priority must be given to profits and profit-making rather than to social reforms and popular consumption. The crunch will then come and they will be forced, like all governments of capitalism sooner or later, to take openly anti-working class measures. 

As a matter of fact the crunch has come sooner rather than later, less than a year after the PS/PC government took office at the end of June 1981. On 12 June this year the French franc was devalued within the European Monetary System, for the second time in less than 9 months in fact, since Mitterrand had already been forced to devalue last October too. The October devaluation had been accompanied by rather timid price controls and mere appeals for some wage moderation. This time it was different. The government has adopted the following measures:

• a legally-imposed wage freeze lasting till the end of October, the only exception being the rise in the minimum wage due on 1 July; a legally-imposed price freeze also until the end of October but with some important exceptions such as oil, gas, electricity and imported goods;
• an increase in contributions to the health service accompanied by a cut in some benefits;
• a similar operation of increased contributions for less benefits regarding the unemployment insurance scheme.

The Minister of Finance, Jacques Delors, has already announced that austerity will not finish at the end of October but will continue. in the form of a restrictive “incomes policy", at least until the end of 1983; in other words, for at least 18 months in all.

Delors has also made no attempt to disguise the fact that the living standards of workers will have fallen by the end of October. He has publicly admitted that, while wages will be completely frozen, prices will rise by at least 2.8 per cent during this period. This will happen not only because prices are much harder to control than wages, but also because a number of exceptions to the so-called "prices freeze” are being allowed, particularly oil products (petrol, heating oil. paraffin) and imported goods. Since one effect of the devaluation will precisely be to increase the prices of imported goods, it is evident how large a loophole this latter will be.

So the government has now done a complete U-turn. The aim is now not to increase popular consumption but to reduce it! The Prime Minister, Pierre Mauroy, had already forewarned, even before the devaluation. that wages were soon going to come under direct attack from the government when he told a PS meeting on 21 May: 

Excessive nominal increases in incomes and wages maintain inflation and deprive our economy of the means to create jobs. The government has decided to act and we will shortly have occasion to talk about this again (Republicain Lorrain, 22 May).

It is clear from this that the government accepts the old. mistaken theory that it is wage increases that cause inflation. In fact, wages only increase in a period of inflation because inflation—an overissue of an inconvertible currency—inevitably leads to a rise in the general price level; wages, the price of labour power, merely rise in line with all other prices. Wage and salary earners are the victims not the cause of inflation.

The government's hope is that its austerity package will bring price rises—currently running at an annual rate of 14 per cent— down to an average of 10 per cent over the 12 months of 1982. This means of course that for the remaining months of the year the rate will have to fall well below 10 per cent. But unless they limit the amount of inconvertible paper money in circulation to what the level of economic activity requires—and there is no evidence whatsoever that this is their intention—then the pressure for prices to go on rising will continue.

If the currency is being overissued, then freezing wages and prices can’t stop prices rising. Certainly this can work for a limited period, just as a dam can stop a river flowing . . . for a limited period. Thus it is possible that the government could achieve a short term success but in the long run they will fail. Eventually, and sooner rather than later, the dam will burst and prices—including wages—will resume their upward trend. Delors is in fact very worried about what is going to happen after the legal wage and price freeze is over and this is why he is hoping to persuade the unions to moderate their wage demands over a longer period.

The union leaders, or some of them, may be prepared to go along with this. French union leaders are also politically involved and may well be prepared to betray their members’ interests to help a government they support just as British union leaders have done when Labour has been in power.

Indeed, just like Labour governments in Britain, the PS/PC government in France hopes to exploit its links with the unions to keep wages down and is publicly boasting that it will be better able to get the unions to co-operate in this than the opposition parties. And it is true that when the previous "right wing’’ government decided in September 1976 to block prices for 3 months it didn't dare block wages as well, as the present "left wing" government has done, limiting itself simply to asking employers not to offer excessive wage increases. But even this brought trade unionists out on to the streets proclaiming "No to Austerity". History shows that allegedly "socialist” governments in all countries are better able to impose austerity on workers than openly capitalist ones. (A case could even be made out for saying that this is their role within capitalism.) What is happening in France today is a further confirmation of this rule.

Two further points must however be made. First, in a period of high unemployment real wages (what wages can buy) will tend to be under pressure anyway for purely economic reasons, irrespective of government policy or of whether the union leaders betray their members or not. Second, if inflation of the currency continues, then nominal money wages will go on rising, once again irrespective of what governments and union leaders may or may not do. But government action to try, in the one case, to reinforce downward pressures on real wages and, in the other, to try to counter the upward pressures on nominal wages clearly reveals that all governments are forced to run capitalism in the only way it can be — against the interests of the wage and salary earning majority. A sustained policy of increasing “popular consumption” under capitalism must sooner or later restrict popular consumption to protect profits.

Actually, as we pointed out in the article last August, Delors did not have such a simplistic solution to the economic crisis as the PCF, the CGT trade union and some of his PC colleagues — that economic activity could he revived by giving people more money to spend. He realised that the French economy was part of the world economy and that a revival in France could not be sustained without a revival in the world capitalist economy. But he too was naive in believing, without any reasonable grounds for doing so, that this world revival would occur within a year and that therefore the French government could safely "reflate” its economy (print more money to finance government spending) in anticipation. In June last year he declared that "the reflation measures already taken by the government . . . are a limited anticipation of the recovery of the world economy which the experts foresee for the end of this year or the beginning of next (The Times, 24 June 1981).

The end of 1981 came, but there was no world recovery. The months of 1982 passed, still no world recovery. The "experts” began to creep back into their holes. Meanwhile, as a direct result of the government's spending financed by the printing press, the rate of inflation remained higher in France than in other countries. . . leading eventually to the devaluation of 12 June and the current austerity measures.

When Prime Minister Pierre Mauroy announced the devaluation he could only remark pathetically that his government had done what it could "but the international recovery was not at the rendez-vous”. It takes two to make a rendez-vous and the PS/ PC government has found out the hard way that governments are in no position to impose a rendez vous on the capitalist economy. Capitalism is a world system which operates according to its own economic laws, going through its regular boom-slump. boom-slump cycles, irrespective of what governments may or may not do. It is true however that, while governments can do nothing to bring about a recovery before it would normally occur, they can. as Marx pointed out. make things worse by mistaken monetary policies, as the present French government just seems to have done. Mauroy would have been better to have employed some other metaphor: "we took a risk and we lost" or "we took a leap in the dark and fell flat on our faces". Or even Harold Wilson's "we were blown off course”!

This utter failure of the PS/PC government in France is yet another confirmation of our contention that capitalism can never be made to work in the interests of the wage and salary earning majority. It is a profit-making system based on the exploitation of wage-labour and can only function as such, whatever the political colour the government may happen to have. Any party which takes on the responsibility for governing under capitalism is sooner or later forced, whether it originally intended to or not, to respect the economic logic of capitalism which decrees that profits must come before wages, that the consumption of the wage and salary earning class must be limited so as to allow profits to be made.

Mitterrand's failure is proof that reformism is a futile waste of time. Since the Labour Party’s economic policy resembles very closely that pursued by Mitterrand until 12 June, there's a lesson here for workers in Britain too.

Adam Buick (Luxemburg)

Finance and Industry: U.S. bogy (1964)

The Finance and Industry Column from the July 1964 issue of the Socialist Standard

INVESTMENT

U.S. bogy

The recent Chrysler/Rootes deal, discussed elsewhere in these pages, has again revived the usual talk of American financial encroachment—not least among our Labour politicians. They raised a similar sort of fuss, it will be remembered, when American Ford increased its stake in U.K. Ford from 55 to 100 per cent, a few years ago.

Similar heartburnings were caused in France last year when Chrysler took over control of Simca, and the French government actually stepped in to put to stop to the deal when they heard that U.S. General Electric was after a stake in Machines Bull, the big electronics firm. But the significant thing to note about the last affair is that the French government eventually relaxed their opposition and allowed a modified arrangement to go through.

For the facts are simple enough. American capitalism is in search of outlets for its capita], and in many cases European firms have not sufficient resources of their own to finance their expansion. Yet expand they must if they are not to be left behind in the race for sales and profit. Bootes with Chrysler’s resources behind them are a far different proposition than they were on their own—for years, in fact, the speculation has been whether they could really survive for long against the bigger units of BMC, Vauxhall, and Ford. Similarly, Machines Bull plus General Electric is in a vastly stronger position to face up to IBM and Elliott than it was on its own. To see the facts as they really are, it is only necessary to observe that IBM’s turnover is twenty times that of Machines Bull; that National Dairy Products, an American milk firm, has a bigger turnover than I.C.I.; that United States Steel produces more steel than the whole of West Germany; that the turnover of General Motors is greater than the whole of the “gross national product” of Holland, and its profits bigger than the national product of Eire.

One way or another, American capital will keep coming into Britain and Europe. Capitalism hates a vacuum. As usual, it is bigness that counts, and bigness that will win the day. And, just as important for European capitalism, if one country refuses it—it will go elsewhere. Modernisation of the Moselle 

STEEL

The Moselle canal

The recent opening of the Moselle canal is a wonderful example of the hard economic facts behind politics.

Just as German capitalism always had envious eyes for the iron ore of French Lorraine, so did French industrialists seize every opportunity to lay their hands on the iron and coal of the Saar. In 1920, the Versailles treaty gave France control of the Saarland for 15 years—as well as handing back Lorraine. In 1945, again, the Saar was incorporated in the French zone of occupation; later, in 1947 it was set up as an independent state though linked economically to France. In 1950, France granted it complete self- government—but in return for its coal output (15 million tons) for fifty years.

Came the Common Market. In 1956, French capitalism was forced to play yet another hand. In return for the handing back of the Saar to Germany, the latter was to participate in the canalisation of the Moselle. By this hard bargain—for both sides—barges of 1,500 tons are now able to travel 170 miles from Thionville to the Rhine, and French steel will be selling more cheaply in South Germany than even Ruhr or Saar steel. The greatest opposition to the canalisation of the Moselle came from the Ruhr steelmakers—it is easy to see why.

So determined was France to get the project through, and so reluctant the Germans, that even with the Saar thrown in the French government had to pay £48 million towards the project, compared with Germany’s £22 million. But already they are planning to extend the canal southwards to Metz and Nancy. Eventually, the plan is to link the Rhine with the Rhone and form one great waterway between the Mediterranean and the North Sea. With huge barges plying along this thousand mile canal, transport costs will be cheapened for French industry in particular. Already German, Dutch and Belgian shippers are competing with their French counterparts for traffic, and the German and French railways threatening to cut their tariffs.

Under capitalism the big get bigger, and the small are forced more and more to the wall. At first sight, there seems little connection between Chrysler moving into Rootes and 5,000 ton barge convoys moving along the Moselle. But the connection’s there alright. Just call it size—plus the prospect of profit.

Stan Hampson

50 Years Ago: The Question of Alsace Lorraine (1967)

The 50 Years Ago column from the December 1967 issue of the Socialist Standard

The question of Alsace Lorraine has received considerable attention from the political and journalistic hirelings of the capitalist class. A vast amount of sloppy sentiment has been thrust upon us with the object of covering up the real facts at issue, a good example of which comes from Mr. Lloyd George. “However long the war may be”, says that worthy, “however great the strain upon our resources, this country intends to stand by her gallant ally, France, until she redeems her oppressed children from the degradation of a foreign yoke”.

Knowing the history of the capitalist class, Socialists reject with scorn their professed sympathy for the workers of any nation. Material interest dominates their every action, as the following demonstrates:

“If Germany could secure a peace based on her present military position”, says a writer in the Daily Chronicle 24.10.17. 

“the whole of this wealth of iron ore, estimated at some 5,000 million tons, would pass under her control . . . Liberate these provinces from her clutch with their 21,000,000 tons of iron ore a year, their 3,800,000 tons of iron smeltings, their 2,300,000 tons of steel smeltings, and useful coalfields of the Somme Valley, and a long step has been taken towards peace”.

“It is clearly an almost vital interest, both for France and Great Britain, that the formation of a huge Franco-German cartel, based on the reciprocal exchange of coal for ore, should be prevented, that we should ourselves supply France with the coke that will enable her to do her own smelting, and that we should take from her in return the iron ore that we now import from Sweden and from Spain”. (“Daily Chronicle”, 24.10.17.)

The evidence given shows the capitalists in their true character, as a cold-blooded, profit-seeking tribe, ready to slaughter millions of workers to gain an advantage over a commercial rival.

From the Socialist Standard, December 1917 Article by E. L. Wake.

Notes. (1930)

From the July 1930 issue of the Socialist Standard

Wealth !

“How much shall we and our guests spend on the wonderful social programme which began in May, and will continue till September?”

“It can hardly be less than £50,000,000; it may be far more.”

. . . . . . .

“Wealthy Americans, accompanied by wives and children, spend £10 to £30 a day at London’s luxury hotels. Rents up to £200 a week are paid for the more elaborate furnished West End houses at the height of the season.”

(“Daily News,” 13/6/’30.)

* * *

Churchill discovers overproduction.

In his Romanes Lecture delivered at Oxford on Thursday, June 19th, Mr. Winston Churchill made some interesting admissions about the inadequacy of the capitalist system, and about the inability of the economists to understand capitalism. The “Daily Telegraph” (20th June) reports him as follows : —

“Mr. Churchill examined the classical doctrines of economics, with their insistence on private enterprise, individual effort, and non-interference by the State, and said that we could clearly see they did not correspond to what was going on now.

If, he proceeded, the doctrines of the old economists no longer serve for the purposes of our society, they must be replaced by a new body of doctrine equally well-related in itself, and equally well-fitting into a general theme.

The root problem of modern world economics was the strange discordance between the consuming and producing power. We were faced with the Curse of Plenty.”

* * *

Birth Control & Unemployment.

The Birth Control Movement have issued a leaflet explaining that France cured unemployment there by means of Birth Control.

Fewer babies— fewer out of work — prosperity — and plenty to eat at Nature’s table.

It’s very simple. Whilst curing unemployment, somehow they left most of the French workers in poverty.

Why are the numbers of out-of-works fewer in France ?

The explanation must be sought in the economic position of the French population, as well as in the post-war reparation work in France, as well as her military situation. An article on this matter will appear shortly.

Editorial: The Power to Produce. (1930)

Editorial from the June 1930 issue of the Socialist Standard

The recuperative powers of modern industry have been fully vindicated by the remarkable position of France eleven years after the war.

In spite of the enormous waste of wealth and loss of man-power during the four years of war, France, according to recent reports, is now being strangled by prosperity ! There are no unemployed worth talking of, and there is a tendency for workers to flock to the easier and better paid occupations, so that, for instance, coal production has seriously slumped in consequence.

A part of France’s opulence is due to the amount they have received from Germany ; under the Dawes Plan they have had over £200,000,000 during the last five years.

Germany has paid heavily in money, labour, and kind since the war to the “victorious” nations, besides harbouring an army of occupation.

How is it with Germany, then? Is Germany sinking under the burden? Not at all. Germany has shouldered the burden and more. She is again attacking the world’s trade routes, both by sea and air, and looks very much like being successful again.

In each case, then, we have an example of the marvellous fecundity of modern industry. When it is also realized how much of the labouring power of to-day is wasted on useless objects, or going over the same greengrocers, and the like, the fruitfulness of industry is seen to be more remarkable still.

Imagine the numberless workers who waste their time in advertising trades, in menial duties for the rich, in military service, and similar occupations; in useless clerical work and salesmanship. If all these workers, including the unemployed and the rich, were devoted to useful occupations wealth would be more abundant still, and would call for a comparatively small amount of effort from each if the work was spread equally over all.

Here, then, is convincing evidence that the sufferings of the workers are not due to any weakness in the capacity to produce wealth, and also exposes the hollowness of the plea of the nationaliser, except that nationalization produces larger profits.

The workers’ attention should, therefore, be directed to securing an alteration in the distribution of wealth. The distribution, of course, depends upon the method of production. The method of production to-day is by means and instruments of production that are privately owned. By converting these privately-owned means into social property the workers will then reap the benefit of the energy they put into the production of wealth, and will also reap a good deal of much-needed leisure and freedom from worry.

When the workers decide to secure this fundamental change there will be no need for Labour sponsored cotton weeks, silk weeks, leather weeks, wool weeks, or any of the other Canute-like or cute dodges with which the employing class try to throw dust in the workers’ eyes.

Cooking the Books: Fairy-tale economics (2022)

The Cooking the Books column from the September 2022 issue of the Socialist Standard

Trussonomics – what has also been dubbed ‘fairy-tale economics’ – teaches, even preaches, that if you cut taxes on businesses, they will have more profits and so will invest more, increasing growth and average living standards.

Cancelling the increase scheduled next year in corporation tax from 19 to 25 percent and reducing employers’ National Insurance contributions will increase the amount of retained profits directly and immediately. Cutting other taxes and a corresponding amount of government spending (for instance, as floated, the reduction in the pay of public sector workers outside London and not giving out any more ‘hand-outs’ to people to help them try to cope with the soaring cost of living) would have the same effect but indirectly and over a longer period.

In recognising the importance of profits for ‘growth’, Truss is being realistic enough. Capitalism is a profit-driven system and does run on profits. Every government must take this into account and give priority to profit-making.

Where she departs from reality for fairyland is in imagining that, just because you allow capitalist enterprises to retain more of their profits, that will make them invest more. This is wrong both in theory and in the light of experience. Businesses will invest only if they think this will bring them more profit; if they don’t calculate that it will, then they won’t invest. And governments can do nothing to change that.

‘Growth’ is the increase in the amount produced in one year compared with previous years. It is conventionally measured by changes in Gross Domestic Product (GDP). Most of this – over 80 percent – is consumed in the course of the year by individuals or governments. The rest is invested in expanding or replacing productive capacity. Because GDP includes replacing the wear and tear of existing buildings, machines and equipment (depreciation), the investment part is not an accurate measure of the increase in productive capacity. Net Domestic Product (NDP), which excludes this, is more accurate, the investment part of which is near to what Marx meant by the ‘capital accumulation’ – the accumulation of profits as more capital – which he saw as the driving force of capitalism rather than growth as such.

Fairy Liz imagines that, after cutting taxes on profits, she can wave her magic wand and, hey presto, enterprises will invest and the economy grow. They tried this in France in the late 70s and early 80s. It didn’t work.

According to L’Express (8 September 1979), referring to Raymond Barre who was then the centre-right (the French equivalent of the Tories, if you like) prime minister:

‘One of the prime minister’s disappointments is that the improvement in the finances and profits of enterprises has not produced the expected boom in investment. The bosses are more and more reluctant to take risks. “Give us the money”, they said, “and we will invest.” Today, with their finances in a healthy state, they add “Give us the markets”. You can’t make an ass that isn’t thirsty drink. A head of an enterprise does not buy machines without outlets for the products they make.’

Barre failed because no government can conjure up the markets on which to sell what expanding capital investment could produce. Truss will fail too for the same reason, especially as the IMF, the Bank of England and many others are predicting a world recession over the next couple of years.

If these forecasts are right, what will happen is that businesses will say ‘Thank you very much. We can use the extra profits to increase the dividends we pay our shareholders. If you want us to invest them, give us the markets’. That, the government can’t do. So, no fairy-tale ending.

Letter From Europe: SOS Longwy (1979)

The Letter From Europe Column from the August 1979 issue of the Socialist Standard

Some miles before Longwy there comes into view the reddish cloud which permanently hangs over it and over nearby Rodange in Luxemburg. As you get nearer you can see on the top of the slag heap which dominates the centre of the town a sign flashing “SOS EMPLOI". Longwy, in other words, is a steel town, and a steel town threatened with massive redundancies.

The world steel industry has been in crisis since 1974—productive capacity exceeds what can be sold profitably—and this has had serious repercussions in the old steel-making areas of Europe, such as Lorraine. The Lorraine steel industry began to develop a hundred or so years ago when a method of using the iron ore found in abundance in the area was discovered. Now that there are more modern methods of production and cheaper sources of iron ore, Lorraine is inevitably suffering the measures to reduce capacity which, within the framework of capitalism, is the only way of “solving” the current crisis. That such drastic measures were going to be necessary was evident as far back as 1976 when, instead of expanding again after a year or so of recession as on previous occasions, steel sales and production continued to stagnate.

The French government waited until the general elections of March 1978 were over (and won) before considering what to do. By then the privately-owned French steel firms were virtually bankrupt. Towards the end of last year the government announced that it was going to take over the running of these firms, appointing its own nominees to preside over the “restructuring” of the industry—the suppression of “excess” capacity—and jobs.

Over Lorraine, the government had a difficult decision to make: where to build a new modern steel works, in Longwy or in Neuves-Maisons, 100 or so kilometres further south near Nancy? In the end they chose Neuves-Maisons. As soon as the announcement was made there was consternation and anger in Longwy since the whole population realised that, on top of the already announced loss of jobs, this meant mass unemployment and a slow decline for their town. Thousands of school-children were assembled in the town centre to release balloons bearing the message “Longwy vivra” (Longwy will live). International passenger trains were stopped; wagons carrying Swedish iron ore were emptied on to the tracks; the frontiers with Belgium and Luxemburg were blocked; and lorries carrying steel products from Holland and, in particular, Germany were stopped and unloaded onto the motorway.

CRS move in

At the end of January two top managers of the steel firm Usinor were held hostage in their offices in Longwy. This led to the first violent clash with the CRS (the para-military riot police with a justified reputation for brutality) when they intervened to free the managers. The local police station was attacked with stones and other missiles. But the attack of 30 January was mild compared with what was to happen on the night of 23/24 February. Members of the CFDT trade union had been occupying a television relay station on a nearby hill and interrupting programmes to screen written messages opposing the planned redundancies. In a surprise attack in the middle of the night the CRS recaptured the station. News of this was announced to the population by the sounding of factory sirens and in no time a crowd of several hundreds had gathered in the centre of town in an angry mood. A bulldozer was commandeered and used against the gates of the police station. The crowd only dispersed after the intervention of the local Communist Party MP, Antoine Porcu, who had arranged a tacit truce: retreat by the crowd and their bulldozer in return for the withdrawal of the CRS (but not the local police) to outside the town limits. Later on in the morning the leaders of the Communist Party (PCF) dominated trade union, the CGT, organised the sacking of the local office of the steel employers’ federation; furniture was thrown out of the windows and files burned.

By now Longwy had acquired a national, and even an international, reputation of being in a fighting mood. The authorities decided that discretion was the better part of valour and kept the CRS out of Longwy, well aware that their very presence there would provoke fresh violence.

But the violence was not yet over. The two trade unions, the CFDT and the CGT had both established radio stations the latter in Longwy’s town hall with the evident blessing and support of the PCF mayor. Since the state in France has a monopoly of broadcasting these stations were technically illegal “pirate” stations and on 17 May jamming began of the CGT station. Radio Coeur d’Acier (Radio Heart of Steel). The result was the worst violence to date. The population was again called out by factory sirens and in the course of five hours fighting during the night 25 people, from the CRS as well as the crowd, were injured and 5 arrests made. Unusually, these 5 were not held in custody and, when they came up for trial, the charges against them were dismissed. The jamming of Radio Coeur d’Acier also stopped.

Clearly, the population of Longwy has shown a remarkable degree of solidarity and determination and this has enabled them to restrict the authority of the central State which has seen itself obliged to keep its riot police away and to allow the trade union radios to continue broadcasting illegally. But, and this is why the central State can afford to sit back and wait, the working class in Longwy are fighting a battle they cannot win. For in trying to keep open an unprofitable and outdated steel works they are not simply fighting against a government decision but against the economic laws of capitalism. If central governments not only in France but in Britain, Germany, Belgium and other countries too have had to bow to the logic of capitalism and cut back their steel industries, then the action of a small town, however determined, is not going to be able to override the iron law of “no profit, no production”.

Defensive Struggles

The sad fact is that the loss of the steel jobs in Longwy is inevitable and the most that the workers affected can hope for is a short postponement of their sackings and bigger redundancy payments. Indeed, this is what their solidarity and determination may bring them in the end and. if it does, it will not have been entirely in vain. But, when analysed unemotionally, it’s precious little. Like its neighbouring town of Athus in Belgium (which also had its clashes with the police when its steelworks was closed—but who remembers this now, except a few old men wondering what’s going to happen when their three-year redundancy benefits come to an end?). Longwy is doomed to decline even if its working class population had chosen to go down fighting.

There are those who don’t share this analysis but who see the clashes in Longwy as “the first flames of a renaissant proletarian flare-up” (Revolution Internationale, April 1979) and who talk of “the flare-up of proletarian violence that has restarted from Longwy” (Jeune Taupe, March-April 1979). According to these starry-eyed idealisers of violence, the events are the beginning of a revival of the working class’ “lost” revolutionary consciousness. Let’s scotch this myth before it goes any further. First, willingness to fight the police is no gauge of revolutionary consciousness (otherwise Manchester United supporters would have to be regarded as hardened revolutionaries). What allows someone to be described as a revolutionary is the aim he seeks—a complete transformation of society. In Longwy, despite the violence, the struggle is purely defensive: to save jobs (and on an issue where, unlike defensive struggles over wages and working conditions, failure is inevitable). Even the fights with the police have been defensive in the sense of being responses to actions started by the police. As for the political consciousness of those involved, unfortunately it is at the same level as in similar industrial towns in other parts of France: mostly support for the so-called Communist Party. Longwy has a PCF member of parliament and a PCF mayor.

The French CP, although still hypocritically paying lip-service to Marx’s ideas, has gone completely nationalist and analyses the steel crisis in France as an attempt by the German steel barons to eliminate a competitor. The German steel barons are supposed to control the Common Market Commission in Brussels and to have instructed Viscount Davignon, the Belgian Commissioner responsible for industrial affairs, to draw up a plan involving the dismantling of the French steel industry. This analysis would be laughable did it not provide the basis for a deliberate campaign by the PCF to stir up anti- German feelings. The PCF mayor of Longlaville, a small commune between Longwy and the Luxemburg border, has put up the following slogan on his town hall: “1870-1914-1939. La Lorraine ne sera pas vendue aux trusts allemands” (1870-1914-1939. Lorraine will not be sold to the German trusts). The present writer has seen this with his own eyes and is therefore prepared to believe reports of similar sentiments being expressed by other PCF members, the worst of which is the following from a certain J Gillet, a local CGT trade union official:

What's going to come about is the domination of Europe and France by the German capitalists. What the Germans were unable to obtain in 1914 and 1939, they are conquering today. Our action can be likened to that of the Resistance. It is a struggle for national independence (quoted in L'Anarcho-Syndicaliste. April-May 1979).

CP Chauvinism

This is not to say that the working class of Longwy are rabid German-haters. Far from it. They are ordinary workers worried about their future who, besides, being for the most part immigrants or children of immigrants from Poland and Italy, have no reason to see themselves as French chauvinists. This is why it is quite disgusting that the PCF should be exploiting the very real fears of the ordinary workers of Longwy in this way. Without exaggeration, their campaign can be said to be on a par with that of the pre-war German Nazis who blamed, again falsely, the problems of unemployed German workers on the Jews. To give credit where it is due, the smaller CFDT trade union has tried to counter this chauvinistic anti-German campaign of the PCF.

Those who see the combative attitude of the workers of Longwy as the beginning of a revival of a revolutionary, socialist consciousness among the working class are deluding themselves. We only wish that it was, but sober reality forces us to recognise that it isn’t. Yet it is an indication of the solidarity and determination the working class are capable of, a display which enables us to confidently conclude that when the workers really do want and understand socialism nothing is going to stop them getting it.

Adam Buick (Luxemburg).

A Forecast of the Coming Revolution: Interview with Paul Lafargue. (1904)

From the November 1904 issue of the Socialist Standard

Amongst the best known leaders of Socialist thought is our comrade Paul Lafargue, author of "The Evolution of Property", "Socialism and the Intellectuals", and many other volumes and pamphlets of great value to International Socialism. A visit to Paris brought us in touch with a French comrade, through whose kindly offices we received an invitation to visit the veteran debater at his pleasant retreat in a little village some dozen miles from the French capital. Lafargue and his wife (once known personally to English Socialists as Laura Marx) received us with the true comradeship, which in palpable form made it plain that “Liberty, Equality, Fraternity”, is no empty phrase amongst Socialists.

Mindful of the interests of the Party, we secured from our comrade the following interesting expression of his views upon some vital topics of moment:

“The two countries which will benefit from the Russo-Japanese War”, said Lafargue, in answer to a query, “are America and England. Though the Japs succeed in expelling Russia from Manchuria, they are at the same time weakening themselves for a long period, and thus limiting their capacity for industrial competition. Again, the financiers of England and America—principally the former—will draw from Japan a great deal even of such profit as may accrue to her in return for their present assistance. Japan has for years been developing extraordinarily, but the War hinders this. The resources she is squandering in war are lost to industry.”

“And the results of all this upon our policy in the Far East, comrade?”

“The most important thing is the appearance of Japan upon the scene as the strong power of the East, so strong that no European country can compete with it. The rise of Japan marks the conclusion of European piracy in the Far East. Nobody expected such an extraordinary power. Further, Japan will organise China, industrially and politically.”

“What is your view, comrade, of the industrial position in Japan?”

“The rise of Japan industrially has been so rapid that the horrors of child and female labour in the England of the early nineteenth century have been reproduced—with the great difference that the intermediate stages from the England of the fifteenth century were totally absent in Japan. The psychological difference is enormous, and must produce a revolt, but the form we cannot forecast. In England and France the revolt was against the machine, and whilst this may not prove so in Japan, this we know—the Japs start with a Socialist movement such as was not, and could not be, in England and France in the initial stages of Capitalism. Just as the Japs adopt and adapt the ready-made science of Europe, so the Social science of the New Age finds there a ready soil. We may expect the Japanese people, who have shown such extraordinary courage on the battlefield, to show in the Social struggle the same indomitable energy and enterprise.”

“Now, as to the War again, comrade, what are its results upon Europe?”

“This war has shown that Russia has made a fool of Europe with a show of power. Particularly has Czarism befooled France. That show has enabled her to draw from France about eleven milliards of francs (some £400,000,000) by State loans and financial companies for the industrial exploitation of Russia. The latter investments have been chiefly for coal-mining and metal works. These found prosperity as long as the Russian State was a huge customer for railway construction, &c, but even before the War this fell off; and now, in so far as they have a revival, it is only the artificial stimulus of war time, which will have its due reaction. Even now the lack of money is strangling this revival. Either victory or defeat for Russia now means revolution—a bourgeois or constitutional revolution. The first thing that the new power will have to do will be to proclaim the bankruptcy of Russia—as the best means to obtain credit. You will recollect a similar process in the French Revolution. The new rulers of Russia will be the more ready to declare this bankruptcy, in that the losers will be, not the Russians but the French. The international effects will be felt primarily in France, where the chief debt of Russia is held. The fall of the present Russian political system will shake the whole fabric of European society.”

“What is the likely effect upon Socialism in France of the loss of all this capital through the fraud and folly of the bourgeois politicians and the financial magnates who dominate them?”

“Ah, that is the question. Remember the fuss about Panama involving only 1½ milliards of francs. You will see why I anticipate great results from the loss of some eight times as much. Only the Socialist Party of France has opposed itself to the Franco-Russian Alliances and denounced it as a fraud upon the French people. The discrediting of all the bourgeois parties must mean the immense growth of the party of the Proletariat. Only the Socialist Party of France, the Revolutionists of France, had the courage and insight to oppose the alliance with despotism.”

“Very good, comrade; so much for the economic factors. What of other forces?”

“Russia is a compound of different nationalities. In the centre the Slavs, surrounded by Poles, Finns, Caucasians, Armenians, &c, held down by main force. These will spring into position again on the occasion of the Revolution, and Poland principally (the Ireland of Russia), which has never lost the sense of nationality, despite the tyranny of centuries, will make her influence felt. She will want to reconstitute her nationality with the Austrian and the German Poles. Thus I believe that the next few years will bring us the European revolution, which, if Socialists are sufficiently bold and well organised, will mean also the Social Revolution.”

This concluded, as far as the War is concerned, one of the most instructive conversations in which 1 ever had the pleasure of participating. In a future issue I hope to reproduce some expressions of our comrade upon trade unionism, but with which it would be a pity to complicate this article. The difference between the Socialists and the pseudo-Socialists can easily be seen by a comparison of the large-mindedness and grip of the situation disclosed by our comrade, with the puny reflection of Capitalist sentimentality exhibited by Jaurès in dealing with this same position. The attitude of the Reformists in France sufficiently indicates the absurdity of the claim of such superficial politicians to in any sense represent Socialism either in France or elsewhere. Jaurès and his school are straining every nerve in a “Stop the War” agitation, on the surface in the interests of peace, but in reality designed to, if possible, stave off the evil day of capitalist collapse. It was not for nothing that our comrades of the Socialist Party of France moved the resolution at the recent International Congress, which declared against compromise and intrigue with capitalist parties. The Socialists of France have fought and are fighting the same battle against treachery and folly of opportunism, which we of The Socialist Party of Great Britain are waging in this country.

I am sure every Socialist in England joins with us in reciprocating the fraternal greetings extended by Paul and Laura Lafargue to the unofficial representatives of British Socialism to whom this interview was accorded.

H. J. Hawkins.

(Socialist Standard, November 1904)

Correspondence

Our comrade Hawkins forwards a copy of the following letter which he has received:

“Draviel, 15.11.04

Dear Comrade,—I have just received No. 3 of THE SOCIALIST STANDARD, containing your interview, and I am glad to find that you have given a very full and faithful account thereof.

Trusting that the paper will be successful and with my best wishes and our kind regards to Mrs Hawkins and yourself.

Yours fraternally

Paul Lafargue." LAFARGUE.

(Socialist Standard, December 1904)

The Right to Disinvest (1997)

From the June 1997 issue of the Socialist Standard

This was the right invoked by a leader of the European employers’ association to justify Renault’s decision in March to close its factory at Vilvoorde on the outskirts of Brussels, throwing 3,100 workers out of a job. The French President. Jacques Chirac, was equally explicit. Factories closing, he said, was ‘‘part of life". All this is very true. Under capitalism firms owning factories and other means of production exist to make a profit.They don’t exist to provide jobs for workers. Firms will only go on investing their capital in production if they calculate this will bring them a profit at the going rate.

If they don’t make profits, or calculate that they wouldn’t, they will hold part of their capital in liquid form, either as cash or as money lent for short periods or used for currency and other form of speculation. They will lay off workers and, if things are really bad, they will close down factories, “disinvest". All this is part of normal life under capitalism.

Things have been bad for Renault. There is overcapacity in the European car industry. In other words, all the car firms taken together have overinvested in facilities for producing cars in relation to the market demand. This has led to intensified competition between them. But who says competition says losers as well as winners. And Renault has been one of the losers.

Its sales have fallen and its share of the market, even in France, has fallen. In 1996 it made an operating loss of £200 million. Under these circumstances it had no choice but to disinvest, to cut back on its productive capacity. This was the only chance it had of staying in the running and of restoring its profitability. The French Stock Exchange understood this. The day after the announcement that the Vilvoorde factory was to close, the price of Renault shares went up.

The workers concerned saw things rather differently: that they had been used and then thrown away, just like a Kleenex as they put it. Naturally they protested. So did other workers, who knew what they meant. On 16 March some 70,000 trade unionists, including 5,000 or so from France, marched through the streets of Brussels.

This march was basically a plea by workers to be treated as human beings and not as commodities. But this is not going to happen under the profit system where workers, or rather their working skills, are commodities, bought by employers whose aim is to make a profit out of them.

The view that the present economic system puts profits before people is in fact more widespread than even socialists sometimes think. An opinion poll carried out in France for the magazine L’Evenement de Jeudi (13/19 March) found that to the question "When you think of the economic system as it operates at present what does that incite in you?”, 41 percent replied fear and 31 percent replied revulsion. Seventy percent thought the economic system "considered the human person as a commodity” and 80 percent disagreed that it "prepared well the future of our children".

No doubt this explains the popularity of a recent book by the novelist Viviane Forrester entitled L’Horreur economique—a title that needs no translating—which mercilessly criticises the present economic system for the way it throws people out of work and leaves them to rot.

The hope must be that this disaffection with the profit system will not be channelled into futile attempts to humanise it—that reformist project has been tried many times this century and failed.

Adam Buick

The Shape of Things to Come—and The Forces That Will Shape Them (1940)

From the August 1940 issue of the Socialist Standard

Those who seek to explain by reference to “ideologies” the swift movement of events in the world, the sudden collapse of impregnable positions, the seemingly inexplicable changes which show the grand old men of yesterday to be the dodderers of to-day, must be bewildered and confused by what is going on before their eyes. In a short period of time they have seen those exponents of supposedly irreconcilable doctrines—Stalin and Hitler—joined in a pact of friendship, while Catholic Italy and Catholic Spain fall more and more under the influence of Nazi Germany, erstwhile enemy of Catholicism. They have seen democratic France turn towards Dictatorship, and Conservatives proclaiming the need to back up “revolutionary” movements. The idealist who tries to discern the pattern in history, past and present, is prevented from doing so because he believes that ideas and beliefs have an independent origin and that one set of ideas will triumph over another if only the men who hold them have leaders of goodwill and integrity. The Socialist who looks to social relations and economic forces is better placed. Not, of course, that the Socialist can predict with certainty just how and when a conflict of forces will work out in the future, but at least he knows what is the nature of the forces on which the issue depends. Knowing, as Marx puts it, that “it is not men’s consciousness which determines their life,” but “their social life which determines their consciousness,” he also allows for the fact that at any given period of history the vital forces at work have to struggle with ideas which resulted from past conditions—”the tradition of all past generations weighs like an alp upon the brain of the living.”

The Weakness of France

Some of the explanations given of the French collapse are of the most superficial kind : Petain, we are told, was a “pessimist ” even in 1917, and Laval “a defeatist and potential traitor”; there were elements in France who were “vaguely anti-Parliamentarian and anti-democratic and equally vaguely pro-Fascist”; Daladier was “a civilian mediocrity,” and Gamelin “a military mediocrity”—and so on. These “explanations” cry aloud themselves to be explained. A little nearer the mark is the Economist’s French correspondent (July 20th, 1940), who says that he interviewed many French officers and “cannot recall one who was not a pessimist, not about the outcome of the war, but about the social and economic difficulties which would open up for France after the end of hostilities.” “It was not,” he says, “the mental attitude that wins wars.”

Some of the newspaper correspondents have, however, shown a more correct and robust grasp of realities in their judgment of the forces at work in France.

A Special Correspondent in France of the Daily Telegraph (June 25th, 1940) pointed out that Petain and Weygand were scared by reports (proved to be incorrect) that Communists had seized public buildings in Paris. This incident shows that preoccupation with maintaining France’s social tranquillity and repressing subversive movements weighed heavily with the two aged soldiers, and that they did not see the situation in its true perspective.”

Mr. Ward Price (Daily Mail, July 8th) mentions the “rich and influential Frenchmen” (including an unnamed “owner of iron ore mines in Lorraine”) who were behind Laval because they thought that “their personal interests would be benefited by co-operation with Germany, or, conversely, that war between the two countries would ruin them.” As long ago as 1931, in pre-Nazi days, Laval had proposed a Franco-German Committee of Economic Co-operation.

Another Daily Mail correspondent, Mr. Francis Tuohy, classifies the people behind French Fascism as “Catholics, Royalists, Officers, aristocracy, big business, police and functionaries, intellectuals and students, the propertied classes in general” (Daily Mail, July 22nd), and according to a French ex-editor, writing in the Manchester Guardian (July 22nd), one of the members of the Petain Cabinet is a Senator named Mireaux, editor of the Temps. “That paper,” he says, “is the organ of the Comité des Forges, the head of which is M. de Wendel, a great friend of M. Laval.” (The Comité des Forges is the organisation of French heavy industry.)

One last quotation on this aspect is from an editorial in the Manchester Guardian (July 12th) :

“That France needs reform is evident enough. In the last twenty years she has had forty-two Ministries. Only five Governments have kept themselves alive for twelve months. Such rapid changes give a mischievous instability to politics. In the background there lurks the power of what M. Herriot called “the 200 best families,” obstructing all social reform and threatening the Governments that did not obey them. It was, indeed, because the revolt against the sinister rule of the banks and big business was so certain at the end of the war, however the war ended, that many rich men were anxious to compound with Hitler ; they were more afraid of victory than of defeat. When defeat came they spoke like the rich friend of Cicero who wrote to him, ” Since the Republic is lost, let us at least keep our property!””

Forces for Change in Europe

The safeguarding of property interests is the dead hand of the past, but what of the more active forces pushing towards change and reorganisation in Europe? Can the men who appear as leaders hold developments in check, or failing that can they guide them into the channels they desire? Are they the creatures or the masters of the forces behind and below them ? We need to be cautious in forecasting events, but it seems a safe conclusion that the regime of Petain and that of his friend Franco are both doomed to fail. Petain’s Foreign Minister, Baudouin, can say (News Chronicle, July 18th) that “the world existing before May 10th is definitely buried,” and think that he is free to determine the destiny of France so that “new relations will be instituted between Capital and Labour and there will be new conceptions of life based on authority, order and obedience.” So also Franco’s brother-in-law and Foreign Minister, Serano Suner, can say (Daily Express, July 19th) that “freedom has been buried for ever in Spain,” but events will determine otherwise. Franco, only a brief while ago, was talking of a new stable order in Spain based on the peasants and national self-sufficiency just as Petain’s Government at the present time “apparently sees France’s role in the new Europe as primarily a peasant and handicraft country” (Daily Telegraph, July 23rd). But the clock of industrial and capitalist development cannot be turned back to medievalism. Franco and Petain both ignored or forgot that they live in a world which is subject to the intense and inescapable pressure of trade and competition ; on the one hand, and working-class resistance on the other. It is not to be forgotten that “a million Republicans are held in prison camps” in Franco’s Spain (W. Forrest, News Chronicle, July 18th). And it is from a Spanish newspaper correspondent in Vichy that the report came that Petain’s Government had to shift from Clermont-Ferrand to Vichy because of the violent and threatening attitude of the workers at the Michelin tyre factory in the former town (Daily Telegraph, July 19th).

Franco used to talk of being free from the pressure of capitalist forces, determined to build up Spain within her own border and on her own resources, but already he has been forced to change his tune to the more familiar one of Spain’s “duty and mission” to command Gibraltar and go in for a policy of Empire building : “We have shed the blood of our dead, not in order to return to the decadent past but in order to build a nation and create an empire” (The Times, July 19th). “Expansion in Africa” is now the order of the day.

When considering the prospects of such dictatorships as those of Petain and Franco, it is worth noticing that the four dictatorships that succeeded in establishing themselves (Russia, Germany, Italy and Turkey), along with some differences had two things in common. In each case power was obtained by a new group, not a mere reshuffling of representatives of existing parties and interests, and in each case those who seized power contrived to do so by using (or exploiting) the more or less constitutional machinery without waging open civil war against the workers or other large representative section of the population. On one or the other of these counts both Franco and Petain fail to possess the qualities that make for comparative permanence (not, of course, that other dictatorships have real permanence either).

It is relevant at this point to consider the position of Russia, and the urge that drove the Stalin regime to enter into the pact with Hitler. The military consideration of not wanting to be isolated in face of Germany and Japan was one aspect, but observers have recently confirmed that behind that fear was the factor of internal economic difficulties. The Moscow correspondent of the American New Republic (quoted in Forward, July 20th) gives it as his judgment that slackening industrial development compelled the Russian Government to take the view that “in both technical organisation and labour, efficiency was advancing so slowly that it would be generations before these departments would compare with those of the modern industrial States.

“Stalin’s way out was an alliance with some big industrial country, in order (1) to ensure Russia’s position of strength in the coming European war; (2) to supplement consumer’s goods industries until they would be able to stand on their own; (3) to supply the machine tools, optical apparatus, etc., which Russia is still forced to import.”

Mr. Louis Fischer, who was for 14 years a newspaper correspondent in Russia, says much the same in his “Stalin and Hitler” (Penguin Special, 6d., May, 1940). He attributes Russia’s industrial slowing down to several factors: “In part (it is) due to military preparations. But it is more adequately explained by the purges and several inherent Soviet economic weaknesses.” (P. 62.)

Here again, as in every other instance of international trends, it is idle to look wholly or mainly to abstract ideas and motives whether of rulers or ruled.

Before leaving the question of the forces making for change in Europe, it is interesting to view the spectacle of Conservatives being forced against every inclination to support movements that may help to undermine the German-Italian dictatorship systems. It is put most strikingly in the columns of the Daily Express. Below are two quotations from recent issues. The first is from an article by Mr. Geoffrey Cox, showing how Franco should be attacked at home if Spain goes to war on Germany’s side: —

“Seize the Canary Islands and other Spanish island possessions and set up there at once a Republican Government which we recognise.

But we can only do this if our appeal is a genuine Republican revolutionary appeal for straight-out revolution.

We must be prepared to co-operate with all the parties of the last Spanish Popular Front Government—Socialists and Communists and Anarchists, as well as Liberals and Radicals. We must get out of our minds all questions of whether these people are Red, or pink or white.

For no other appeal will rouse Spain now except the cry of the Republic.”—(Daily Express July 19th.)

The second quotation is from an editorial: —

“Our allies are ordinary people, not Fascist dictators. And since the ordinary people of Europe are now ruled by Fascists we must organise revolutions.

If (by some terrible folly) Britain were ever at war with Soviet Russia, we would work for a Right Wing revolution there. Since we are fighting Fascists, we must work for Left Wing revolutions in Europe. That is only common sense.

And so our Foreign Office and Ministry of Information should change their whole mentality.

Respectable ex-public school-boys and English gentlemen were admirably suited for conducting our relations with Right Wing politicians abroad. But they are the wrong people for carrying on underground intrigues, organising strikes, arranging sabotage and fomenting general discontent in Europe.”

— (Daily Express, July 23rd.)

In that quarter, at least, the dead hand of the past has been thrown off in so far as the winning of the war is concerned.

Edgar Hardcastle

Finance and Industry: In the doldrums (1963)

The Finance and Industry Column from the March 1963 issue of the Socialist Standard

STEEL

In the doldrums

At a cost of £100 million and more than eight years work Colvilles have just opened a new steel plant in Scotland. A few weeks earlier the similar Spencer mill in South Wales was put into operation by Richard Thomas and Baldwins. Each plant is capable of producing about 750,000 tons of steel a year and these figures could be doubled fairly easily with further development.

Both projects are in fact the result of a Tory Government compromise. The original idea was to build just one plant of one million tons capacity, but there was such a struggle over whether it was to be sited in Wales or in Scotland that it was finally decided to allow one mill to each area (the Government could do this as it was putting up most of the money). Altogether an interesting sidelight on the ways of our political planners, though it must be added that their “expert” advisers then were quite sure that there would be ample room for both plants by 1963. The steel industry was booming and it looked as though it would continue so.

Alas for their prophecies. The Scottish mill is in fact working at only 20 per cent. of capacity and the Welsh one is hardly better. The industry as a whole is ticking over at about 70 per cent. of capacity and output in 1962, far from rising as originally expected, was actually 4 million tons less than in 1960. The prospects are hardly less dim for 1963.

What has happened, of course, is that British steel producers, and nearly all the other steel producers of the world, have widely miscalculated in their estimates of demand. Each nation has invested during the last ten years vast quantities of capital in new and bigger steelworks. It would be too much to imagine that they have done this without being aware that all their rivals were doing the same—capitalists are hardly as stupid as that—but there is certainly no reason to suppose that they did not know the risks.

The harsh reality is that capitalists, either as individuals or as national groups, have to engage in these insane activities if they are to maintain their positions in the race. So we see the United States, Germany, Japan, France, Belgium, Luxembourg, Italy and the U.K.—having spent huge sums in expanding their iron and steel production —all faced with a large proportion of this plant lying idle for lack of orders.

INVESTMENT

French eyes on the U.S.

Having already upset the United States by keeping Britain out of the Common Market, the French Government is needling them still further. It is trying to persuade the other members of the Six to take a closer look at the way American capital is penetrating into Europe.

Three incidents have recently helped to spark this off. The first was the way in which Chrysler got control over Simca, the French car makers (see below); the second was the big project by Libby, the American food firm to establish a canning factory in the newly irrigated region in the south of France; and third has been the recent closing of the Remington typewriter works at Caliure and the transfer of its production to Holland.

If the French intention is to stop American capital coming into Europe, and even into France, it is wasting its time. Capitalism, whether American or any other variety, hates a vacuum and if there is any prospect of profit they will seek a way of getting it. But the Remington incident is rather interesting since it echoes something similar nearer home.

At the end of February, the Glasgow factory of Remington Rand paid off over a thousand of its workers. The reason? The same as in France—lack of orders. And, again as in France, production of typewriters (portables only this time) will be concentrated in Holland. A nice illustration of the international workings of modern capitalism.

CARS

Chyrsler gets a hold

Of the Big Three in the American motor industry (Ford, General Motors, and Chrysler), only Chrysler have not managed to get themselves established in Europe. At least until recently.

Now, by crafty manoeuvrings behind the scenes, largely via Switzerland, they have managed to acquire 63 per cent. of the shares in Simca, the big French car manufacturers. This, of course, means financial control. They are now in a position to do battle in the European market with their fellow American companies; with Ford and their plants at Dagenham and Cologne, and with General Motors at Luton (Vauxhall) and Russelsheim (Opel).

As a producer, Simca is not as big as Opel nor is it quite up to Ford, Germany. It is comparable, however, with Dagenham and bigger than Vauxhall. At the same time, though it is the smallest of the French producers, it is the second biggest exporter; it seems clear, therefore, that Chrysler will not wait long before carrying their struggle with their competitors in the United States, into Europe.

Just to add spice to the situation, the big Italian firm of Fiat also holds shares in Simca—about 25 per cent. Latest reports from France are that Fiat has just set up a large-scale network of agents to sell their cars there. At the same time, Simca are busily exporting to Italy.

There are many people who firmly believe that the capitalist system makes sense. They ought to take a long, hard look at the international motor industry.

MONOPOLY

A little light

The Economist reported recently that the electric light bulb manufacturers are increasing their prices by 5 to 10 per cent. Apparently they have all come to this idea at the same time.

Once upon a time, when they belonged to ELMA (the Electric Light Fittings Association) they used to make this kind of decision whilst freely admitting at the same time that they had all got together to make it. But the Monopolies Commission stepped in and they were compelled to disband the Association.

Now, apparently, they follow the practice of courteously telling their fellow companies beforehand of forthcoming price changes. The arrangement is known as an “information agreement." The essential difference from what they did before being that it is not registrable with the Restrictive Practices Court.

Another example of how, under capitalism, the more things change, the more they remain the same.

Stan Hampson

After This Crisis . . . ? (1976)

From the February 1976 issue of the Socialist Standard

The world capitalist economic and political system is in crisis. The signs are so obvious that the mere statement of fact is almost superfluous. The system is beset by not one crisis but several crises. These are separate entities, but inter-related and from the same root cause.

The three major economic problems for all industrialized countries, and the primary producing countries of the so-called Third World, are: inflation, the five-fold increase in oil prices since 1973, and a recession. If the previous cycles of commerce ending in slumps could be referred to as capitalism’s “anarchy of production”, the present situation is chaos. A few press headlines from a single day, 7th September 1975, bear witness to this.

Japanese Bankruptcies at a Peak.

Inflation Rises in U.S.

French Reflation Scorned.

TUC Expecting Autumn Reflation to Cut Jobless.

The “French reflation” was the proposed use of £3,300 million by the French government to try to stimulate the economy, and the dissatisfaction was expressed by the trade union movement and others. M. Georges Seguy of the CGT, the Communist-dominated trade-union organization, said the plan did not alter “the disastrous situation in which our country finds itself”. The French "Socialist” Party said the plan "did not meet needs on employment and prices”.

The TUC’s hope was voiced at the recent conference in Blackpool where a majority had decided in favour of the Labour Government’s £6-a-week wage-restraint policy — a condition of acceptance being the expectation of measures to bring down unemployment. Len Murray, the TUC General Secretary, said that backing the wages policy would “make it easier for the Chancellor to start judicious and selective measures to reflate the economy . . . We shall be looking for action this Autumn to project jobs.” (His word was “project”, not “protect”!)

Trade-union leaders and politicians are, of course, whistling in the dark. The Labour government’s efforts to create jobs are as unrealistic as its other attempts to control capitalism. A sizeable proportion of the unemployed are young people who have been unable to find jobs since they left school last July. In a recent speech in Edinburgh, Edward Heath spoke of a danger that disillusioned youngsters might reject political democracy if the problem were not solved.

Laid Off

Earlier last year, in the writer’s experience, workmates and fellow trade-unionists were not over-concerned at the situation. Something was wrong, there were problems, but things would sort themselves out. The same attitude was found in the audiences at Socialist Party meetings. Now it is different. People up the road are being laid off, “shaken out”, and “surplus to requirements”. Examples in South London are the closure of Decca Radar at Battersea, due to the decline in the sales of colour TV, and the proposed shut-down of the Telephone Manufacturing Company at West Dulwich.

The latter is due chiefly to the cut-back in Post Office orders. The Company’s work is to be centralized at an existing factory in Wiltshire. Two larger companies are also affected by the Post Office cut-back: Plessey’s and the General Electric Company, with 20,000 predicted additions to the numbers of unemployed. In the case of TMC the redundancies include many West Indians and Asians from the Brixton, Herne Hill and Croydon areas. Some long-service employees are jobless: the writer knows one who has been with the Company since he left school in 1938.

The editorials and city columns are full of strident talk about “overmanning”, lack of “mobility of labour”, and “natural wastage”. The writers (employees themselves, of course, and presumably members of the National Union of Journalists) wish other workers to travel obediently at a moment’s notice. This insistence on a “Have tools, will travel” outlook appears only when it suits — or seems to suit — capitalism. Perhaps the ideal situation would be an “Unemployed Disposal Unit” into which workers and their dependants could be fed when not required.

There have been numerous comparisons with the crisis of 1931. There are two economic phenomena from the past which haunt capitalism — the German inflation of 1923 and the “Wall Street Crash” of 1929. At the Durham Miners’ Rally last summer Harold Wilson said we were “facing the worst recession since the 1930s, because the world was in the midst of the most serious decline in trade for over forty years”. We have a slump — because we have a slump!

The President of Australian Council of Trade Unions, Bob Hawke, stated at the CTU Conference in Melbourne that Australia “faced an economic crisis unprecedented since the 1930s”; and “the entire Western world was in a state of economic crisis, and it was naive to blame the Labour government for Australia’s economic difficulties”. (Hawke is also the federal president of the Australian Labour Party.)

Comparison with the nineteen-thirties is interesting in more ways than one. It is not only that the scale of the present recession is the most widespread since that period, but that the proposed solutions are remarkably similar. At the TUC conference, what was most noticeable was the sheer poverty of ideas. The so-called “left”, arguing against the £6-a-week policy, said it would intensify the depression by further reducing workers’ purchasing power: bigger wage increases would increase the workers’ ability to buy goods and services and so make things better.

This is a variant of the simplistic theory that crises occur because the working class cannot buy back what it has produced. Of course it is true that the workers cannot buy the total product of their labour: not only during a depression, however, but at all other times, including periods of expansion and “recovery”. Marx dealt with this in Capital, Volume 2:

  [that the workers] receiving too small a portion of their own product, and the evil would be remedied by giving them a larger share of it, or raising their wages, we should reply that crises are precisely always preceded by a period in which wages rise generally, and the working class actually get a larger share of the annual product intended for consumption. From the point of view of simple commonsense, such a period should rather remove a crisis.

Once a slump is under way, things happen cumulatively. Workers are laid off, their purchasing power decreases, and a chain reaction sets in affecting other industries and other workers. Simultaneously, this helps promote the capitalists’ “loss of confidence” and their cut-back in investment. But the idea that the situation can be remedied by advancing wages is unrealistic. This is unpalatable for Socialists to state, and workers often resent it, but it cannot be ignored.

Searching for Answers

Equally dangerous, but more reactionary, are the continual calls for import controls. This type of economic nationalism in the nineteen-thirties produced restrictions and counter-restrictions, tariffs and further tariffs. The slump and attempted national solutions at the expense of other capitalist states was a contributory factor to dictatorship in countries particularly "hemmed in” by these policies.

There are still demands for further nationalization as the supposed cure for the problems produced by capitalism. This is happening in sections of the motorcar industry. Such is the magnitude of the recession that Coventry, a centre of car production, has been transformed within a couple of years from a high-employment and high-wage area into one with unemployment figures comparable with the depressed areas of Northern Ireland and North-east England. According to the Sunday Telegraph (10th September 1975) car production has fallen to 44 per cent. of its capacity, and studies conducted by McKinsey & Co. (American management consultants) estimate that a further cut of 25 per cent. is necessary ‘“to ensure a profitable future” for the industry.

Part of the objection to the government’s putting money into the Chrysler company was that it would prejudice the recovery of Leyland. The McKinsey report blames “overmanning” and low productivity for the problems of the car industry, and of course this is the cry with regard to British capitalism generally. The proposition is that if only British workers were as profitably employed as workers in other countries — “our competitors” — all would be well. The flaw in this analysis is the recession and high unemployment in those other countries: the Japanese bankruptcies mentioned earlier, the 8 million unemployed in the United States, the numbers in Germany and France.

Under the heading ‘“Shipyards fight undercutting” the Daily Telegraph (2nd October 1975) had a report:

  The desperate hunt for new orders is leading European shipbuilders being undercut by Far East yards that are trying to tempt British and other shipping companies to give them contracts.

It went on:

  The slump in international trade means there is vast over-capacity in shipbuilding, with the bulk of it in Japan and the emerging nations such as South Korea. Japanese yards fear they will be down to only 25 per cent capacity in about two years’ time, and have been pressing for Government help to retain their 50 per cent share of world shipbuilding.

  Now European shipbuilders are starting to urge the Common Market to draw up a shipbuilding policy that will thwart the Japanese ideas.

It must be obvious that neither low productivity nor high productivity in capitalist society is the answer.

Frank Simpkins