Editorial: This money business (1956)

Editorial from the October 1956 issue of the Socialist Standard 

Socialists do not hold that “money is the root of all evil". (And before knowledgeable readers rush for their pens to let us know that we have the quotation wrong, Socialists likewise do not hold that it is the love of money that is at fault.) What Socialists hold is that the root evil of the modern world is Capitalism, the social system based on private ownership of the means of production and distribution. Capitalism presupposes the existence of an owning class and of a working class, and the whole arrangement for producing goods and services for sale at a profit. Money is a necessary part of Capitalism. It is not the root, but a rank, festering jungle growth on the surface in which the world's population blindly gropes its way.

The way the Socialist views this jungle growth is quite unlike the way of the various non and anti-Socialists. This is an acid test and it separates the Socialist from all the others. When the Liberal or Tory believer in Capitalism says “Of course you can’t do without money,” he is at least talking a sort of sense, for what he means is that you can’t have Capitalism without a money system. But the Socialist has no desire to keep Capitalism and knows very well that if you have Socialism you do not need and could not have a money system.

It is at this point that the Labourite and Communist joins the Liberal and Tory and echoes their jibe that nobody in his senses really believes in a world without money. Which just goes to show what a deplorable effect the Labour and Communist policy of running Capitalism has had on their ideas. Half a century ago not only Socialists but also the pioneers of the organisations that eventually produced the Labour and Communist parties were quite familiar with this proposition and felt no need to break into asinine guffaws about it. They knew then that this was an essential part of Socialism. Now their successors are deeply shocked by the suggestion, which comes to them out of their forgotten past as from another world. They have handled Capitalist problems so long that they are Capitalist-minded. Now they line up with the open defenders of Capitalism to produce their muddled plans for dealing with dollar gaps, balance of trade deficits, inflation, direct and indirect taxation and all the rest of the rigmarole. And what a rigmarole it all is.

Let us ask them one question. When they say “you can’t do without money,” what is it they think they are doing with the money system. Anyone who wants a good laugh should go to any of the orthodox economic text-books and read about the functions money is supposed to perform, or alternately go to any Labour or Communist electoral programme and compare their promises of what they would do with what they actually do when in office, here or in Russia. One of the jokes in the textbooks is that money is “universally acceptable.” Apart from dollars and gold bullion there is hardly a currency in the world that meets this requirement. Or take the nearly universal swindle of the past quarter of a century practiced on depositors in savings banks. Authority assures them, and they believe, that they will get their money back, with interest; in fact they get back depreciated currency which will buy far less than the amount originally deposited.

It isn't only Socialists who are critical of the ever more complex monetary and taxation systems. Money is supposed, according to the textbooks, to smooth the working of industry, promote greater production and in particular to facilitate efficient international exchange. Yet, what do we see? In America farmers have for years been paid money to increase production., Now the stuff has piled up into mountains of unsaleable surpluses while elsewhere in the world, and in America itself, are millions of undernourished people who cannot afford to buy it.

On this ponder the Economist (June 9, 1956);—

“Farmers will soon be ploughing growing crops back into the ground under Government auspices, something they have not done since 1933."

The American Government is now going to stifle production by paying farmers to take land out of the cultivation of cotton, maize, wheat, rice, tobacco and peanuts. But because the Bill could not be passed in time by Congress some of these crops are already growing and to get the money from the Government for not producing crops the farmers are being allowed to plough them in. Mr. John O’Rourke, editor of the Washington Daily News, who is in this country, read about the English titled lady who was ejected from her farm for not producing enough crops (for which incidentally British farmers likewise receive government subsidies). So Mr. O’Rourke wrote to the Daily Express (June 11, 1956) suggesting that this crazy muddle could be straightened out by a trans-Atlantic switch; let the English lady lease her unproductive farm to an American who could then be paid for not having produced, and in return she could hire an over-productive American farm and be paid by the English Government for producing more. Would this be crazy? Surely, but not more so than the reality.

And in face of this, the empty-headed opponents of Socialism tell us that it would not work!

Now take a glance at two believers in Capitalism and see what they have to say about their money system. First, Mr. George Murray, who in the Daily Mail (February 20, 1956) had an article “Is Money Out of Date?” 

"Between the wars Britain tried deflation as the remedy for her currency troubles. The result was that prices and wages fell. We had to drive such hard bargains with our overseas suppliers of food and raw materials that they could not afford to buy our goods. We had chronic unemployment. To-day we are hell-bent for inflation. The result of this is that the price of our goods is forced so high that our overseas customers still cannot afford to buy them, though they are much better supplied with money. And we have 'overfull' employment"

Mr Murray, who, of course, does not really/believe that money is “out of date,” lamely ends with a "plea for finding, somehow or other, some means to strike a balance: as if Capitalism ever did, or ever could provide price stability and an uninterrupted flow of production and sale. 

Lastly, there is the witty and sometimes shrewd economist who is permitted by the Sunday Times to poke irreverent fun at our rulers and their financial antics, Mr. George Schwartz. In the issue for April 15,1956, he discussed the popular but quite baseless belief that Chancellors of the Exchequer are really able to master the monetary monster nominally under their control. Mr. Schwartz doesn't think that Mr. MacMillan even understands the simpler aspects of monetary policy such as the connection between the note issue and the price level; but even if he did, it is Schwartz’s opinion that the whole thing is now hardly comprehensible or controllable. Here is a typical passage:—

“Who’s in charge of it? I can tell you that right away. No one. Of course, Chancellors talk largely of operating switches and of pulling plugs as if they were in charge of a control panel that registered the pressure in every part of the kingdom, and the outside world as well. But it is nothing like that. A Chancellor to-day is confronted with a vast refuse heap of smouldering fiscal expedients that have piled up over the past fifty years. On Budget day he can only make elaborate flourishes and then deliver a few pokes at the accumulated rubbish. If he did any more it might come down on his head or burst into flames. At the end of this ritual the Chancellor mounts the pile for a peroration, and for the rest of the week there is a rattling of the lids of empty dustbins which passes for a debate."

Mr. Schwartz delivers many more blows at the monetary and fiscal system, and ends by demanding at once and just as a first instalment the instant abolition of purchase tax, entertainment tax and the distributed profits tax. But does Mr. Schwartz believe that this will be done? and if it were would it seriously diminish the monumental muddle? Capitalism is a mess, of which its monetary contortions are a symptom. There is no cure within Capitalism. There is even little chance that it will ever get back to the crude but less complicated monetary chaps of the 19th century. Socialism offers the only way and by comparison its proposition that people of the world shall co-operate to produce what the world needs and provide free access to it, without ownership, sale or profit, is simplicity itself. And if you think it still sounds shocking in its simplicity, a little thought about it will soon rid it of its terrors for you.

Editorial: The Proposition They Will Not Consider (1957)

Editorial from the July 1957 issue of the Socialist Standard

Over a century ago the famous pamphlet, “The Communist Manifesto," was published, beginning with the words: “A spectre is haunting Europe —the spectre of Communism." It went on to describe the terror that the Communist movement inspired among the rulers of Austria, France, Germany, Russia, etc.

Almost any journalist picking up that pamphlet today would be likely to write about the way these words apply to the world in 1957—but he would be entirely wrong! It is not history repeating itself, but a word being distorted into an opposite meaning.

In 1847 when Marx and Engels wrote about the governments and the ruling class being afraid of Communism, they meant by Communism a movement springing from the workers, having for its aim the overthrow of capitalism and establishment of Socialism. And they meant by Socialism what the S.P.G.B. means today, a system of society in which all people would co-operate in producing articles and services freely for the benefit of all.

It is true that for many years now the governments of half the world, and, above all, the American Government, have been scared by the spectre of Russia and that they call it the spectre of "Communism": which just goes to show how the politicians can hypnotise themselves with words.

Communist Party the enemy of Communism

The Russian Government is controlled by the Russian Communist Party, but the Russian social system is not Communism (or Socialism), and the Russian Government is no more interested in achieving such a social system than is General Eisenhower or General Franco. If the Russian Government were interested in spreading Communism in the world, it would, of course, show its interest by starting at home and introducing Communism into Russia; but this would mean abolishing the very comfortable privileged position occupied in Russian state capitalism by governmental and managerial circles of the population. Why should they seek to destroy the capitalism that gives them power and privilege and wealth?

Why not be friends with the Russian Government?

Are we saying then that the American Government’s fears of, and hostility towards, the Russian Government is based on pure illusion? By no means. American and Russian capitalism have just the same kinds of reasons for mutual hostility and fear as British and American capitalism had in relation to Germany in 1914 and 1939.

Back in the 19th century West European governments feared the Russian dictatorship under the Czars because Russia’s ruling class had ambitions to expand into the Middle East and the Mediterranean and into India and the Far East; in all of which regions they clashed with the similar expansionist ambitions of other Powers. Exactly the same rivalries exist today, the main difference being that nowadays the Western politicians say (and seemingly many individuals actually believe) that their clash with Russia has to do with "Communism." What it has to do with is the economic rivalry that capitalism gives rise to between the separate capitalist Powers, of which Russia is now in the top rank, surpassed in power only by America.

If Communism (or Socialism) in the sense of the Communist Manifesto were the issue dividing the world today, the Russian Government would be lined up with the ruling class of America, Britain, Japan, India, etc., to crush it

They never consider Socialism

The Western politicians and Press will give thousands of words and acres of space to the Western case against the Russian bloc and give less but quite a lot of space to those who defend the Russian point of view or argue in favour of seeking compromise with it. But they never on any account give space to considering the case for Socialism (or Communism) in the sense in which the pioneers of Socialism used it and meant it

But, after all, why should they? Why should the Press take the trouble to answer the Socialist case since nobody (except the S.P.G.B. and its companion parties) ever puts it? When do Gaitskell or Bevan or Bulganin ever put the case for Socialism? Probably all three would (privately) feel embarrassed at trying to prove that society can look to a hopeful future inside capitalism, with its production for sale and profit, the wages system, the continuance of property incomes, investment, competition for markets, etc. But when do they ever say in public that Socialism necessarily means abolishing that capitalist social system?

And as they don’t ever say it, the capitalist Press falls into line and happily ignores the case for Socialism.

Labour Party comforters of Capitalism

Mr. George Schwartz, in the Sunday Times (9/6/57), picked on the latest Labour Party pension plan as an example of this. He pointed out that the capitalist Press gave much and sympathetic notice to the plan.

“Cos why? Because it is in essence a straightforward exercise in capitalist reasoning based almost wholly on capitalistic methods of calculation and reckoning. Bless you, I have met stockbrokers who couldn’t spell the word dialectic, who have read it with interest and understanding.

". . . There is no talk about the annihilating that disreputable trio, rent, interest and profits. There is no nonsense about egalitarianism. On the contrary, the main thesis and principle is that the more you put in the more you take out. In short, chums, it is a stem lecture on the virtues of capitalist attitudes and behaviour."

And the H-Bomb Controversy

It is a far cry from the Labour Party’s new scheme for contributory old age pensions to the rights and wrongs of the H-bomb (though there is a certain relationship: if “the bomb must fall,” it doesn't seem to matter what pension you might otherwise have been going to get!) In this field, too, the Press will consider every aspect except the Socialist point of view. The Manchester Guardian in a frank editorial (3/6/57) tried to face up to the implications of the Bishop of Manchester’s demand that the British Government should renounce the H-bomb—whatever the consequences. The editor of the Guardian thought that the chances of such an example being followed by general disarmament could be put at about one in ten. the far higher probability would, he thought, be the more or less speedy Russian overrunning of Western Europe and Britain. To the advocates of giving up the H-bomb he put the question:

"Are they prepared to face the agony of living under  a Communist system?” Recoiling from this himself, he prefers to rely on the deterrent value of having the bomb.

"The deterrent theory is that on the contrary their use by either side has become less likely. Six big bombs, as has been said before, would be enough to destroy central government in the Soviet empire."

It is not our purpose here to follow the Guardian into these muddy depths, but to put a question and a challenge. The challenge is to the Guardian to give its evidence for its utterly fantastic statement that the Russian Government behaves as it does because its objective “is a Communist world.”

Where does the Guardian so hide itself from the facts of capitalist life that it cannot see that the Russian Government behaves like any other expanding Capitalist Power because it is an expanding capitalist Power?

Our question is to ask the Guardian why, when it is actually trying to be frank and objective, it can only see the choice between capitalism with the H-bomb and capitalism without the H-bomb: why does the Guardian steadfastly turn away from even considering that perhaps after all there really is a case for destroying war at its source in the capitalist foundations of the social system on both sides of the Iron Curtain. Which means considering the case for Socialism, and that the Guardian cannot bring itself to do.

‘You’ve Never Had it So Good’ (1960)

From the February 1960 issue of the Socialist Standard

Mr Macmillan has served the Tory party very well indeed. Along with shrewdness and other qualities he has shown himself to be a master showman in a team of showmen. But when he told the British workers that they’ve never had it so good, there must have been some of his fellow Tories who doubted its wisdom. A tag like this labels a politician and his party for a very long time and when their luck runs out—as it always does—they will never live it down. But a master showman has to take risks and so far the thing has exceeded beyond all possible expectations. He persuaded his followers that it is so, and then the Opposition, so that we now have Mr Anthony Crosland, Labour MP for Grimsby, endorsing it. He confessed this at a Labour Conference at Utrecht, and he told them that the British workers “now scarcely seem, either to themselves or to other classes, to be suffering from oppression or capitalist exploitation”. (Daily Mail 11.1.60). It helped to win the support of a majority of the electors for the Tory party. It convinced the Archbishop of Canterbury, Dr Fisher, though it failed to win his approval. He calls it a “dreadful phrase”. “Whenever I hear it”, he said, “I say to myself in the words of Our Lord, ‘how hardly shall they that have riches enter into the Kingdom of Heaven'”. (Daily Telegraph 11.1.60). With his comfortable £7,500 a year he is worried lest the general affluence of the workers should imperil their souls.

But just how much substance is there in this propaganda, and how much of it exists only in the distorting imagination of the politicians and Press?

Half the Story

There is no lack of supposed evidence to back it up. Let us look at some of it.

The Evening Standard (1.1.60) greeted the new year with an editorial telling us about the “Age of Plenty”. The opening paragraph set the tone:-

The age of scrimping is over. The age of affluence has begun. In the past 10 years Britain has passed through a social revolution whose full impact is only likely to be felt in the new decade which has just begun. For the first time in history the greater part of this country’s people—and not just the fortunate minority—have money to spare beyond their immediate needs.

Even a light-hearted journalist would hardly make this claim without evidence, and evidence is there.

One figure sums up the progress of this revolution. As the 1960’s begin, everyone living in this country has an income higher by an average of £3 a week than at the beginning of the ‘fifties.

But before passing on we must look more closely at the average increase of £3 a week. It was clearly derived from figures that turned up in the Press about that time. In the Financial Times (31.12.59) under the heading “Standard of Living” we were told that average personal income per head of the population jumped from £220 in 1950 to £375 in 1959. Sure enough the difference, £155 a year, is £3 a week so what more need be said? But what the writer omitted to point out was that in the same period, on official figures, the price level (cost of living) rose by 47 per cent. To buy in 1959 what could be bought for £220 in 1950 would need £323. So the real increase was not £3 a week but the difference between £323 and £375, a matter of about £1 a week, and that the £1 a week would buy in 1959 only about half that a like amount would have bought in 1950.

Another figure published by the Financial Times showed “expenditure” per head of the population (after deducting from average income the amount of taxation and the amount put aside as savings). This produced an increase between 1950 and 1959, of nearly £2 a week. But again, after allowing for the increase of prices this seemingly large increase gets cut down to a mere 4 per cent-—not a lot to show for 10 years of “social revolution”.

It is particularly surprising that the Financial Times should give figures in this incomplete form because four years ago (6.9.55) when that paper looked at similar figures published then, they pointed out what a miserable showing the figures gave when compared with 1938.They made the point that the real increase per head of the population (after allowing for higher prices) was the trifling rise of 4½  per cent as compared with 1938.

It happens to be useful to the case of those who see a vast increase of the standard of living to have chosen the year 1950 because average expenditure in all the post-war years up to 1952 (after allowing for higher prices) was actually below the pre-war level.

Mr George Schwartz in the Sunday Times (10.1.60) had his own line of comment. He at least is very well aware of the fact that much of the current statistical evidence of higher incomes is merely a reflection of the steady rise in prices and a corresponding decrease in the purchasing power of money. On this occasion he wanted to make the point that booming production and exports are not a new phase in British capitalism. He reproduced columns of figures showing how “peace and prosperity” were booming in the years 1903 to 1913. Again some very imposing figures, but when we look at prices in these ten years we see that they were steadily rising, a total rise of about 12 per cent. Wages were rising more slowly so that the higher wage actually bought less.

Staggering Truth

What is really astounding about Macmillan’s boast is that, at least on average, it contains an element of truth, remembering however that the rich too are in the average figures. The state of most British workers really is a little better than it has ever been before. Of course there are large numbers of clerical workers (including most of the civil service, bank clerks and others) who are worse off than they were before the war, and some industrial workers, including London busmen, are also worse off. But with fewer unemployed and several million married women enjoying the dubious advantage of doing two jobs, home and away, working class purchasing power has gone up. But what a commentary on capitalism that this small advance can be hailed as a social revolution and set the church worrying about the corrupting influence of working class “riches”!

Just about the turn of the year agricultural workers advanced to £8 a week for 46 hours toil. Hundreds of thousands of other men in industry and transport are on much the same level. The average earnings of women of 18 and over in manufacturing industry is £6 17 0 a week—hardly a corrupting level of affluence. And there are over 2 million people who in the course of a year are poor enough to qualify for National Assistance—with wives and children the number is much larger.

Real Capitalism

In spite of the talk about a social revolution capitalism has not changed. It is still a system of minority wealth and mass poverty and insecurity—and just at present it is profits, stock exchange prices and the emergence of new crops of millionaires that truly mark the phase of “you never had it so good”. And the Church, with a rise of £50 million in the value of its investments in the past five years, hasn’t done badly.

Just before Christmas, the People (20.12.59) gave unintentionally a close-up of the capitalism we still have with us. Mr Gilbert Harding ran a charity fund and invited readers to subscribe. He was proud to report that 40,000 readers had sent in £15,000 (it later reached £30,000). In particular he recorded that 89 workers in Reading had voted to his fund the £630 held by their defunct Social Club. They had been employed by a biscuit firm but a week before Christmas the firm closed down, unable to meet the competition of larger firms. In all, 290 workers got the sack, “with not a penny in compensation from the firm”, although many were likely to get other jobs, “for most of them the Christmas prospect looked bleak”. Mr Harding was entitled to single out the charitable mindedness of the workers who gave the money to his fund, the money “they had scrimped and saved to put the social club on its feet”.

But there was another item of interest. The People disclosed that when the chairman of the firm died “he left a quarter of a million pounds—all made out of biscuits”.

How much more useful it would have been to point out that the quarter of a million was just part of the tribute levied by the capitalist class from the workers, not “made out of biscuits” but out of them.

The socialist struggle has not ended, it has hardly begun, and it will achieve in due time a social system which really will be a social revolution. One in which, incidentally, it will not be necessary for workers to scrimp and save to help the discarded members of their class.

Edgar Hardcastle

Aspect: Money for Nothing (1967)

The Aspect column from the March 1967 issue of the Socialist Standard

In the Sunday Times on January 29th, Mr. George Schwartz used his column to put his views about high and low interest rates and about some of those who have theorised on the matter. He recalled the late Lord Dalton, Labour Government Chancellor of the Exchequer, who believed that it was a simple matter for a government to keep interest rates at a very low level, and an American Secretary of the Treasury who shared that view. The idea is not dead: “Even at this moment there is an assumption that the Finance Ministers of the leading countries have only to put their heads together to cheapen money all round. The higher economics refuses to regard the rate of interest as a simple function of the demand for and the supply of loanable funds . . .”.

Schwartz commented on the Bank Rate:

  It is fashionable to talk of the Bank Rate as an antiquated weapon, but the antiquated thinking is in the minds of the critics. Bank rate is not a weapon but an index. It registers the going level of interest rates which is determined by all the forces operating upon saving and borrowing.

Marx long ago described the factors which immediately determine the rate of interest in about the same words as those used by Schwartz. (Perhaps Schwartz had been looking up what Marx wrote?). “. . . the relation between the supply of loanable capital on the one side and the demand for it on the other, decide at any time the market level of interest". (Capital, Vol. 3, p. 430.)

Marx described how capitalist profit derives from the unpaid labour of the working class and how, if the capitalist is using borrowed funds, he has to pay away part of this profit in the form of interest, the amount depending on the prevailing interest rates:

  . . . we shall find that a low rate of interest generally corresponds to periods of prosperity, or of extra profit, a rise of interest to the transition between prosperity and its reverse, and a maximum of interest to up to a point of extreme usury to the period of crisis. . . . It may happen, however, that low interest is found in times of stagnation, and moderately rising interest in times of increasing activity. The rate of interest reaches its highest point during crises, when money must be borrowed in order to meet payments at any cost. (Capital, Vol. 3).

Particular interest rates vary according to the class of security, and the length of the time for which the money is borrowed, but the average rate of interest, like the average rate of profit, shows long periods of stability, apart from the ups and downs referred to above.

  The average rate of interest appears in every country for long epochs as a constant magnitude, because the general rate of profit—in spite of the continual variation of the particular rates of profit, in which a variation in one sphere is offset by an opposite variation in another sphere—varies only in long intervals. 

In our day there is continual argument between those economists who expect the average rate of interest to remain high for many years and those who expect it to fall.

It follows from the way in which interest rates are determined that, as Schwartz points out, a government cannot determine those rates simply by exhortation or by monetary manipulation but would have to control all the economic factors which combine to affect the supply and demand for loanable funds. Schwartz recalled the belief some people held in the years before the war that there was a tendency for interest rates to go on falling till they reached zero. It was at that time that the theories of Silvio Gesell had some vogue, in particular his scheme of “free money” which, he claimed would do away with interest payments.

But the will o' the wisp of very low or zero interest rates on loans was much older than Gesell, whose works were first translated into English in 1929— the year before his death. Gesell had been influenced by Proudhon, and Proudhon had been preceded by John Gray, who was writing in the first half of the nineteenth century.

Gesell proposed that money should be issued in a form which depreciated with every week from the date of issue, his suggestion being that each note should lose one-tenth of one per cent of its face value each week. This, he thought, would deter people from holding on to money, they would want to get rid of it quickly and this would keep the level of investment up and the rate of interest down and would also obviate depressions.

The basic economic fallacies of Proudhon and John Gray were examined by Marx in his Critique of Political Economy and Capital (Vol. 3, chapter XXI). Both Proudhon and Gray wanted capitalism, but not the features which inescapably belong to it. They wanted products to be bought and sold but not to conform to the economic laws of commodity production. Products were to have their price determined directly by a National Bank which would issue certificates related to the amount of labour it required to produce them. Those certificates were then to circulate as money: no-one would need to pay high interest rates for loans or indeed any interest at all.

Gesell’s particular scheme has not caught on although Keynes, who combined a low opinion of Marx with a high opinion of Gesell, expressed the view that “the future will learn more from the spirit of Gesell than that of Marx”, (General Theory of Employment).

But we have had quite a good test of the Gesell theory, even if not in the form he proposed.

For a quarter of a century money in this country has been more or less steadily depreciating but far from interest rates foiling to zero, Bank rate has recently been up to a peak 7 per cent and one of the government’s complaints at the present time is that manufacturers have been slowing down their rate of investment.

As befits followers of Keynes low interest rates have been an article of faith with the Labour Party. Their publication Twelve Wasted Years (1963) had scathing criticisms of the Tory government for failing to keep interest rates down.

In the election campaign in 1964, Labour were promising lower interest rates generally, including the hope of very low rates on house mortgage loans. Events soon overtook them, as shown by the rise in the Bank rate to the same level as under the Tories and by mortgage rates at the end of 1966 more than double their promised three per cent. Like Gray, Proudhon, Gesell and Keynes, Labour are trying to have capitalism without its inherent consequences.

Edgar Hardcastle

Marx and the Sunday Times (1963)

From the November 1963 issue of the Socialist Standard

Some readers of the George Schwartz column in the Sunday Times of September 15th will have been surprised to see a headline “But Marx didn’t say so” and still more surprised at the opening paragraph:

“The process of enlightenment goes on apace, and at such a pace that one is apt to be bedazzled. I say this somewhat ruefully because an article in the current number of the Economica on “Marxian Value Reconsidered” almost persuades me to become a Marxian.”

Schwartz quoted extensively from the article in question to show, among other things, that Marx never believed capitalism would collapse through breakdown in a crisis; on the contrary, as Marx himself put it: “There are no permanent crises,” and that Marx did not accept a theory of general over-production.

“The trouble arises,” says Schwartz, in his paraphrase of Marx, “because the economy does not progress evenly. The very dynamism of capitalist enterprise brings about miscalculations and disproportionalities. The respective equilibriums of the various lines of production are constantly being disturbed and the conflict periodically leads to a crises which necessitates a transformation of the system.”

At this point Mr. Schwartz draws back from his passing feeling of affinity with Marx and offers to discuss amicably with the ghost of Karl the problem of seeking corrective action for capitalism’s maladjustments.

The article from which Schwartz quotes is by Thomas Sowell of Rutgers University USA, and in the August issue of Economica (London School of Economics, 10s) Sowell sets out to explain (with numerous quotations and references to sources) the meaning of Marx’s law of value and its place in the general framework of his analysis of capitalism, and to show how Marx’s approach to economics differed from that of other economists. Sowell also examines Marx’s views on crises and disposes of some common misconceptions-to the surprise of Mr. Schwartz. It may surprise both Sowell and Schwartz to know that recognition of the wrongness of the “collapse” theories is not new for the SPGB. In the 1932 crisis, for example, in a short pamphlet “Why capitalism will not collapse,” earlier crises were examined and the conclusion drawn:

. . . there is no simple way out of capitalism by leaving the system to collapse of its own accord. Until a sufficient number of workers are prepared to organize politically for the conscious purpose of ending capitalism, that system will stagger on indefinitely from one crisis to another.

At that time leaders of the ILP and the Communist Party were hysterically proclaiming the imminent collapse of capitalism.

Edgar Hardcastle