Guild “Socialism.” A Good Thing for Capitalist Ratepayers. (1922)

From the September 1922 issue of the Socialist Standard

The “London Building Guild” commenced its existence in July, 1920, by promising to show government officials and builders how to build houses more cheaply and at the same time pay their workers for loss of time through sickness or inclement weather.

An offspring of the “Guild Socialist” movement, it endorsed the principles and promises of Guild Socialism, claiming that the workers themselves would control, and that by the growth and extension of their movement the workers would gradually gain control over the whole of industry and be enabled thereby to set up a new order of society in which the capitalist would be entirely eliminated.

Because of the demand for workers’ dwellings the Building Guild rapidly outstripped the guilds of other industries. Their contracts., according to the “Building Guildsman,” May, 1922, spread over 70 Guild committees, amount to £3,000,000. Notwithstanding this rapid growth, however, it is questionable whether the Guild is financially sound. The Co-operative Wholesale Society, concerned about the competition between their building department and the Guilds, have declined to finance them further, and the Guilds have retaliated by placing their insurance business elsewhere. The Federation of Building Trade Operatives have come to the rescue of the Guild for the time being, but the latter is evidently in a tight corner financially as they are making desperate appeals for loans. The June number of the “Building Guildsman,” displays on its cover in bold type the words, “Lend promptly or the Guild can’t develop.” Before doing so, however, the trade unionist, at any rate, will do well to critically examine the need for its development.

What, in the first place, would the workers say of a builder, or any other capitalist, who, while constantly boasting of the extension of his business, appealed to them for loans in order to carry out the work? Yet this is what the Guild does; because under it the workers organise themselves merely to give service. The capitalist is eliminated but the Guild does not get the profit, while the local authorities get their houses at the bare cost of labour and materials. The Guild contract, according to Mr. Ernest Selley, writing in the “Building Guild in London,” is described as follows :—

 “The Guild form of contract, as Approved by the Ministry of Health for Municipal Housing Schemes, provides that the price paid by the local authorities shall be the prime cost of material and labour at standard rates. To this sum, 6 per cent. is added to cover head office administration, plant, insurance, and, if necessary, interest on borrowed capital. In addition, there is an allowance of £40 a house to enable the Guild to guarantee continuous pay to its workmen in all contingencies. Thus, with full publicity as to costs, the Guild removes all doubt as to the existence of invisible margins and hidden profits.”

In the London District Area committees are set up consisting of delegates from trade unions and there is also a board of directors elected by the trade unions affiliated to the National Federation of Building Trade Operatives. The board is responsible for the appointment of managers and headquarters staff while the local committees make arrangements for the supply of labour. Members of the committees can be selected by the committee itself, to fill the best jobs without reference to their qualifications, and the way is open for wire pulling and jobbery. It is easy to see that whatever line the committees adopt there is bound to be friction over this question. Where jobs are concerned there is always competition and jealousy, together with numerous charges of corruption, true or untrue.

The business of the Guilds is carried on by means of borrowed capital, the interest on which is a portion of the surplus value produced by the Guild workers. Whether the Guild obtains a share of this surplus value for the extension of their business, or for any other purpose, does not transpire. In building working-class dwellings, however, they profess to be prompted by a desire to keep the cost of building low in order that the rents may be low; but the corporations they build for are under no obligation in this respect, and whatever profits are made by them on the letting go to the relief of capitalist ratepayers. Neither corporations nor guildsmen can any longer pretend that the workers are affected by reductions in rates, when every reduction in the cost of living—even where sliding scales are not in operation—is a signal for a reduction in wages.

Maintenance during sickness and inclement weather is made the most of by Guild propagandists. Really it is their only asset, though such payment is not confined to the Guilds nor does it represent a big slice out of profits. In itself it is certainly not worth the tremendous propaganda of confusion carried on by Guild Socialists. As an immediate benefit it is small compensation for the extra amount of unemployment likely to be caused by the general adoption of Guild methods—if all the Guild tales of quantitative results are true. Moreover, the Guilds can only guarantee employment while they obtain contracts; to do this they must be cheaper than capitalist firms.

They must enter the competitive market with the ordinary capitalist—who only differs from them in that he does not promise a millenium when he has captured all the trade—adopting all his methods for intensive exploitation of their wage slaves.

In fact they have already arrived at this, point and the need for coercing and hustling their workers is not only admitted but is seriously discussed in the May issue of the “Building Guildsman,” by Mr. S. G. Hobson, who. Says :—

 ”If we succeed in making Labour the first charge upon the industry and in consequence establish industrial maintenance; and if, as a result, production falls to an uneconomic level, one of the pillars of the Guild edifice would be seriously shaken. No use blinking that !

  “As a matter of fact, it is not true. Guild production, generally stated, is in excess of capitalist production, whilst there can be no question of Guild quality. But it is true that there are men working on Guild contracts who are without conviction of any kind, and who regard the Guild very much as they would regard an employer. Let us be quite frank: these men are a danger to Guild development. Whatever the cost, they must be dealt with.

  ”There still remains, however, the broad question : Must Guild discipline be maintained by the usual Capitalist methods of dismissal, driving, threats, and (wherever possible) Taylorism, piecework, and bonus? Or is there a better way? “

We see, therefore, that it is merely a question of the method, there is no doubt about the necessity of getting more out of the workers even though “Guild production, generally stated, is in excess of capitalist production.”

The capitalist nature of the Guild is fully demonstrated in the above quotation; particularly in the assertion that production must be kept at an economic level. The cry of the capitalist everywhere and always.

The quality of Guild work, too, is always stressed by their advocates; but this is a doubtful advantage from the workers standpoint. Many workers owe their jobs to the fact that capitalists, as a rule, pay more attention to cheapness and quantity than they do to quality, with the result that expenditure on repairs and maintenance becomes necessary.

Again, why should the employee of the Guild regard it as anything else but an employer? What else is it? Is he not exploited by the Guild? The Guild committee may give their services free. Their customers may obtain a better and cheaper commodity; but all that only proves the Guild worker’s more intensive exploitation, because, after all, he only gets wages; no more and no less than other capitalist employees.

Guild Socialism is a fraud on the workers, because it promises to eliminate the capitalist while it retains capitalism. It patches up the wages system with maintenance, instead of showing that wages, or the price of labour power, must always be but a mere fraction of the wealth produced by the workers.

Guild Socialists promise betterment for the workers here and now, and an easy transition from Capitalism to Socialism. Already their chief concern is for the financial success of their business contracts and not at all for the education of the workers in Socialism, without which there can be no transition, easy or otherwise.

F. Foan

Gilded Capitalism. (1921)

Book Review from the August 1921 issue of the Socialist Standard

"Guild Socialism Re-Stated."by G. D. H. Cole. 6s. Nett.

Among those whose wont it is "to meddle and muddle and fuddle" in vain efforts to "evolve" wage-slavery into something more palatable to the working class, Mr. Cole is indeed the king. After colossal endeavours to construct a scheme in which society would "afford the greatest possible opportunity for individual and collective self-expression for all its members," our author produces, complete with all its trappings of class division and contradictions, its hideous countenance of war which is hell and "peace" which is worse— capitalism.

Somehow or other our author noticed the "aspirations" of the workers. These "aspirations" he and his select circle of guildsmen have discussed until there is placed before us the plan whereby the social organism, impelled by the logic of his arguments, will flow into the mould that Mr. Cole has been able to "devise and create."

The latter objects to the class character of capitalism. He eliminates it. This or that economic prop offends his eye. Out it comes. It is painted—and replaced. The result is— Guild Socialism.

Without any consideration whatever of productive forces, economic structure or development, Mr. Cole calmly constructs his social edifice. This he whittles away until it will fit nicely and squarely on the economic structure of capitalism, in a manner favourable to "small scale producers." Then he impudently takes the existing trade union movement, and alters its shape and policy until it will furnish him with the means of "transition."

The author bases his case on what he himself terms an assumption : that society is to be regarded as a complex of associations held together by the wills of their members, whose well-being is its purpose. Doubtless this assumption gained weight with the author after thoroughly surveying capitalism to-day. For us it is enough to know that society's members are held together and their relations decided by the manner of gaining a livelihood.

On this "assumption" he builds his system. With him there is no question of "Historical foundation, economic structure, Socialist result." Mr. Cole starts from the top. His system when completely established, will be built "on the basis of large scale production and the world market." "Industrial organisation" will "develope the tradition of free communal service," then will come, "from producer and consumer alike, a wide-spread demand for goods of finer quality," which will bring about "a return over a considerable sphere, to small-scale production."

Our M.A. is certainly amusing.

The system of society we live in is a veritable hotch-potch of antagonisms and contradictions. It is class-divided. Those who make life possible exist, half fed, half clothed, half sheltered. The drones live luxuriously, debauched and useless. The poverty of the workers, the wealth of their masters, the class cleavage, the contradictions of capitalism, all have grown with the development of the productive forces. The capitalist class cannot control these forces, which tirelessly strive to break through their capitalist "shell." But working-class agency is needed. Mr. Cole sees the danger.

Back to "small scale production" !

The words "evolutionary" and "revolutionary" we told are capable of bearing a variety of interpretations. Revolution implies force, though not, in our author's opinion, necessarily on a large scale. By "evolutionary" some mean "political," but "there is also a wider sense in which 'evolutionary' tactics can denote a method applicable not merely to politics, but to every sphere of social action, economic and civic as well as political." The policy, then, should be the maximum use of the "evolutionary weapons" plus the minimum of "revolutionary action." The more evolution the less revolution.

Doubtless the reader will be pleased to hear of these new "interpretations." We, however, are quite content with the meanings implied when the words are used in other branches of science. The word evolution expresses the fact that "Nature, and all things in nature" (contrary to old beliefs) change. Evolution does not imply any particular manner or method, of change. What is more, scientists who fully admit the process of change are to this day, in various branches of science, seeking the How and the Why.

Further, evolution does not imply that an organism must necessarily change every moment of its existence. "If there is no perceptible change in environment an organism may remain practically the same for ages" (Dennis Bird). It should also be remembered that it is folly to apply the laws governing evolution in one phase of nature to any and everything.

By revolution is meant a complete change. "The man who says that the secret of progress is 'evolution, not revolution,' may be talking very good social philosophy—I have nothing to do with that—but he is not talking science as he thinks. In every modern geological work you read of periodical 'revolutions' in the story of the earth" (Joseph McCabe). "The records of those old revolutions of the earth's surface are contained in the stones beneath our feet" (Prof. Geikie).

Human society has evolved. Its evolution is distinctly marked by each of those totally different systems that we know as Primitive Communism, Chattel Slavery, Feudalism, and Capitalism.

Each system of society functions from a certain basis—the productive forces at a particular stage of their development. Each system flourishes while there is scope for these forces to evolve. When, however, the productive forces are fettered, the conflict between the classes that are the human expression of economic development, reaches its culminating point. The class next in the order of social evolution overthrows the existing system. The new one is born. But as Boudin (who has been speaking of philosophy and science) says: "There is a continuity of human society itself notwithstanding the changes in the form of its organisation . . just as there is continuity in the economic structure of human society notwithstanding the different 'economies' which were prevalent at different stages of its development."

So to Mr. Cole's twaddle of "evolutionary weapons" plus "revolutionary action," "working-class economic power," "productive control of industry," and so on, we will say that working class activity on the eve of revolution will be determined, as now, by the conditions of capitalism.

The book is all confusion and camouflage. The charms of its author's Utopia inspire contempt. Financial problems, provision of capital, regulation of incomes and prices, coercive functions, railway season ticket holders' associations, telephone users' associations, leaders, discipline, and authority— each and all to satisfy the "aspirations" of the workers !

"Have I not assumed the case against equality of income?" Yes—and yet emphatically no (p. 72). Does Guild Socialism claim to be international ? "It is hard to answer ' yes' or 'no' to that question" (p. 208).

Our author may increase his output; he may persistently continue to white-wash the class war. He may blare "Return to small-scale production," or Primitive Communism, or any other old thing. The workers will organise politically; the workers will abolish capitalism; the productive forces will be unfettered. The private ownership of the means of life, with its corollary, production for profit, will give way to common ownership and production for use.

A. H.

"And Found Wanting." (1921)

Book Review from the August 1921 issue of the Socialist Standard

"The Coming Revolution," by Gerald Gould.

For the Socialist this book has little value, if one excludes certain statistics and information given in the appendix, which may be useful for reference, it is a jumble of sentiment and false economic conclusions, a book written to quiet the heated and affrighted imaginations of the "middle class," and to relieve the conscience of its author. He has no realisation of the existence of the class war, although, in his search for moral justification for a revolution, he seems to have seen it "disappearing round a corner "; he lacks comprehension of the materialistic conception of history, and does not hesitate to contradict himself.

Let me go further into details:

Mr. Gould is convinced that there is going to be a working-class revolution. Here he seeks to show:

1. Why it is inevitable.
2. Why it is justified.
3. How it will, or can be, accomplished.

For those who wish to know "it is to be about the simplest and most homely of all subjects— the cost of living," and again, "the cause of any upheaval that happens will be the cost of living."

In view of the fact that prices are now falling the prospects of revolution must be fading slowly and silently away !

But justification of and excuses for the Revolution are our author's chief worry. Writing as he does for timid ''middle-class" sentimentalists he has to show that "Labour's demands and requirements are natural" and "the issue a moral one." This is an untenable position to take up, and, of course, Mr. Gould fails to maintain it. For one thing, the excuse that these demands are natural can cut both ways, as it is as natural for the capitalist to welcome unemployment and pay low wages as it is for the workers to seek to force wages up.

Now with regard to its accomplishing.

Our author thinks it possible that the high cost of living may force the workers into a bloody revolution. In case it does he has found a scapegoat, though why one should be needed, and who will demand excuses from the victorious workers after the Revolution he does not say and I do not know. It may be his friends of "the impoverished middle classes" will want justification for the slaughter of the innocents. Anyway, all demands of that sort have been anticipated and need not disturb the rest of any Direct Actionist, for "if ever a bloody revolution breaks out in this country a large share of the responsibility will have to be borne by Bonar Law and other Tory leaders, who made incendiary speeches on the Ulster Theme."

But Mr. Gould does not think a bloody revolution at all likely, because "nobody is less revolutionary by temperament than the British Working Man," than whom "nobody is saner and kinder." (I think we have all met phrases like these before in such papers as the ''Daily Mail" and the "Daily Express.") And, of course, we always have "the courage and statesmanship of Trade Unionists" which will save the country again if need be as they did at the time of the railway strike of 1919, and the Triple Alliance swindle of the present year. The settlement of the strikes in question would suggest that the statesmanship of Trade Union officials consists of a willingness to be bluffed by Lloyd George and an anxiety not to incur the latter's displeasure by any hesitation in retailing the same bluff to their members.

The anticipated revolution, however, is to be peaceful. It will start with a general strike. Guild Socialists will prepare a new system in "intellectual readiness to take over on the collapse of the old." Private capitalists will buy one another out, and incidentally reduce the National Debt. Nationalisation will be installed and a redistribution of national wealth will take place.

Now, in the first place can a general strike meet with success? Our author admits that, in the event of one taking place, "the poor would be the first to suffer, since, unlike the rich, they would not have reserves of material commodities," but thinks that this could "be averted if no element of violence entered in at any stage of the struggle." Poor, ingenuous Mr. Gould ! Does he really think that the Government would abstain from violence if that alone could save capitalism ?

But probably he does not recognise that the Government is but the tool of the capitalists, for he seems hurt and surprised to realise that "as with the employers so with the Government itself."

Again, he does not show how sitting still with folded arms can provide loaves of bread.

But then, even if a general strike were successful and the workers followed the plans set forth in this book, they would still be wage slaves. Nationalisation is but intensified capitalism and holds out no remedy to the worker. Mr. Gould's method of attaining it is, however, rather amusing. He first makes it clear that you must "not simply expropriate the owners of an industry without compensation." You must make a grant to the shareholders "to prevent actual hardship," else what becomes of the "philoprogenitive vicar in his poverty-stricken country vicarage" if you rob him of his shares in the Great Eastern Railway ? Here you have a frank admission of failure, for even after Nationalisation there will be it seems, "actual hardship" and "poverty-stricken country vicarages." This by the way. The method of obtaining the money for this grant is novel indeed. Assume you nationalise the railways first, and the cost of buying out the shareholders is 500 millions, you make a levy on capital sufficient to yield this amount. By this means the rich railowners provide part of the money necessary for their own expropriation, and as the Government, whilst paying out 500 millions only, receives 500 millions rail stock and 500 millions from the levy, the National Debt is reduced by 500 millions. Repeat this with every industry in turn, and then "Hail the Revolution!" It reminds one of the problem of the two snakes who started eating each other from the tail !

Having seen that wages, at present, are the workers' chief concern, and not wishing that his Utopia should offend by their non-existence, Mr. Gould makes it clear that payment for labour power will not cease. That is what he means when he talks of a redistribution of wealth. Having persuaded the capitalists to buy one another out, the statesmen of the trade unions, under the tutorship of Guild Socialists, would run industry for the nation, "treat the workers like men and brothers," and pay a family, on the basis of present production, about £400 per annum.

The examples Mr. Gould gives to show the increase in production that will result from the kindly treatment of the workers is instructive:

A Mr. S. J. L. Vincent, A.M.I.C.E., borough surveyor at Newbury, builds houses. He guarantees a 48 hour week, and treats his workmen like brothers, so that they, "feeling that they are not working to build up profits but to build houses," respond in the same spirit. Of course, Mr. S. J. L. Vincent, A.M.I.C.E.'s object is to sow the seeds of love among his workmen, and so it must be quite an unforeseen accident that he can build houses at £650 each while contractors, at a period of dearer materials, asked £875. As the cost of bricks, etc., to Mr. Vincent was more than to the contractors, and as his income was probably not much lees, the difference in price must be in his wages expenditure. Yet Mr. Gould quotes this and says to the workers "see what benefits will result from nationalisation, under which you will be treated like brothers." All I can see is increased unemployment, and nowhere in this book are we told, what provision is to be made for those who, owing to increased production, have nothing to do. Also we are not told who is going to condescend to treat their workers like brothers.

Will their exploiters do so then any more than now, or is this an invitation to the ''middle class" to reap the reward of their imagined intellectual superiority on the backs of the workers ?

But our chief quarrel with Mr. Gould is over his citation of Marx as an authority for his conclusions. He does not understand Marxian economics and philosophy, and should confine himself to Sidney Webb and Fabianism. Marxism and Fabianism are quite incompatible, and it is therefore ignorance of one or both which makes him support his tottering ideas with selections from the two of them.

See how he misinterprets Marx. He summarises Marx's description of the transformation from capitalism to Socialism as the taking over by the workers "in one solid lump, of the capital which private capitalism itself has in accordance with the laws of its own development, coagulated into that lump." Marx taught that capital, i.e., wealth used to exploit labour, will cease to exist with the passing of capitalism, since the workers cannot exploit themselves. To talk about "taking over capital," therefore, is nonsense ; anyway, it isn't Marx.

In passing, one should notice the phrase "private capitalism" here. Its insertion shows that when our author speaks of Nationalisation he has State capitalism in mind.

Did he understand the primary theory in Marx, that of value, which states that the value of a commodity is measured by the amount of labour socially necessary for its reproduction, he would not be puzzled by the fact that fertile ground on which little labour is spent produces greater value than less productive ground on which a greater amount of labour is expended. Also he would never be so foolish as to write : "The workers insist on higher wages so that they may cope with the higher prices. The capitalist often has no objection. He simply raises his prices again, so as to get back the extra amount he has to pay in the cost of labour."

The capitalist, like the worker, is bound by the laws of the system and cannot raise prices at will. But then, Mr. Gould does not realise that the system controls man, he thinks man controls the system, and has but to will a new world in order to produce it, ignoring social development.

Yet we can agree with the last sentence in the book, "there is no third way" (i.e., to attain Socialism). There is not even a second. The only way is for the workers to study and understand their position, and the laws governing the society of which they are a part, for then they can and will become possessed of the machinery of government, and under the protecion of the power then at their disposal, work with the economic forces to mould the new classless society, the Socialist Republic.

W. J. R.

Capitalism's Dilemma. (1921)

Book Review from the January 1921 issue of the Socialist Standard

England and the New Era, by Brougham Villiers. T. Fisher Unwin. 12s. 6d.

Mr. Villiers' work, "England and the New Era," is so well written and arranged that the subject—with most writers dry and tedious— is made quite interesting and in places even instructive. He assumes that there must inevitably be a new era, because the forces operating within the present order unless consciously controlled will bring disaster and chaos on human society.

According to him, every nation in the old world, with the exception of England, is so weighed down with debt that they are virtually bankrupt, and will be compelled to repudiate their debts. "England," he says, "may readily find herself alone in the new era, the only nation in the whole world bearing a crushing burden of debt, competing with nations which have virtually gone through the bankruptcy court and come out with free hands." From this we discover quite early that his conception of a "new era" is not different from the old order in its fundamentals.

In his introductory remarks Mr. Villiers lays much stress on the aspirations of small nations to establish their independence. He says: "Sinn Fein is no isolated phenomenon: It is only the Irish manifestation of a universal spirit." He fails to show, however, that the realisation of their ambitions will modify in any way the general character of the capitalist system. The capitalists of each country, large and small, will still compete for the world's markets, and amalgamate into opposing groups in the same way that they did in 1914. While the workers can be blinded with the ashes of Imperialism or the dust of Nationalism, it is plain that they have yet to learn that they are both built on their slavery.

Mr. Villiers' second disruptive force is the Labour movement throughout the world. He says: "There are, of course, vast differences in form between its manifestations in various countries and in the same country at various times, but in Germany and France, in Great Britain and in Russia, among the most moderate 'collectivists' and the most extreme revolutionaries, there is an essential unity of idea, a common conception of a new order utterly different from that which is falling to pieces around us. It is here, as will be seen later on, that the hope of the world will be found ; here, if anywhere, is the foundation from which a new order can arise." (Page 52.)

In none of the countries mentioned by Mr. Villiers, nor in those he has not mentioned, is the Labour movement revolutionary. While there may be revolutionaries in every land, the Labour movement everywhere is. merely reformist. The reforms advocated may be different in the different countries; that they are reforms is their "essential unity of idea," and their "vast differences in form" amount to little or nothing because none of the forms are based on Socialism, but only seek to modify the existing order of society.

Mr. Villiers is, of course, unable to show from the manifestoes or programmes of the Labour Party in this country that it is revolutionary, so he gives a brief sketch of the movement in which he says "The terms 'masters and men' had given way to 'employers and employees' even before 1911, an indication in itself of the coming spirit. Just as villeinage could no longer be maintained once the villeins felt it to be an indignity ; if the working classes no longer wish to be employees producing goods for anyone's profit, such a change in the point of view must in the long run be equally fundamental." (Page 59)

All of which is extremely consoling to those capitalists who fear that Bolshevism is the beginning of the end. While capitalists generally will be quite willing that the workers should call themselves by any name they choose so long as they leave them surplus value. But the mere wishing for a better system by the workers, or a rooted objection to produce for the profit of others, will not get them a better system, even "in the long run."

A still more hopeful sign for Mr. Villiers is the revolt of the rank and file of the trade unions against their leaders. If this action were the result of their growing knowledge it would indeed be a hopeful sign; but as Mr. Villiers himself points out, many of the strikes are of a "frivolous nature." As the workers understand their position more clearly it is safe to say that their actions on the industrial field will be based on common sense, instead of becoming wild or frivolous.

The Trade Union and Co-operative movements and their growth in recent years are also indications to Mr. Villiers of the approaching revolution, although the rank and file of these movements are still engrossed with the idea of obtaining paltry advances of wages, or a few coppers in the pound discount on the wages they, spend at the stores—facts that in themselves reflect the ever-growing poverty of the workers.

But the greatest advance of all, according to our author, is the propaganda of "Guild Socialism." He claims, that "this has greatly enriched, if not the philosophy of Socialism, at least the stock of ideas current among British Socialists." One of these enriching ideas is quoted by him from a Fabian pamphlet on  Guild Socialism" by Mr. G. D. H. Cole as follows :

   "There is no hope in Bureaucratic society. Nor any hope or chance of capitalism lasting much longer. . . . That puts it up to you either to accept what I am saying or else find some means by which you can induce men to go on producing, other than the fear of hunger. . . . Hunger has made men work in the past, but it is everywhere breaking down to-day. Either men won't go on working at all or else they will go on working for some quite different reason." (Page 61-2.)

All of which is just as vague and indefinite as Mr. Villiers' indications of a coming revolution. Though he thinks it is all true, and that "capitalism will work no longer for labour is refusing to work it." Of course wild statements of this kind cannot be substantiated by facts. Everywhere the unemployed are demanding that they shall be put to work, and already there are signs that competition for jobs is resulting in speeding up and reductions in wages. Many industries are working short time, but it is against the wishes of the operatives, who would much prefer to work overtime. In their eyes a week's wages is the essential thing, and they must make capitalism work to get it.

In his concluding chapter called "Creative Revolution" Mr. Villiers tries to show that the Labour Movement is revolutionary and that its adherents are increasing enormously. He does not tell us, however, that these numbers are made up by including the members of affiliated trade unions, co-operative societies, etc., the bulk of whom have never even tried to understand what the Labour Movement stands for. True they are nearly all more or less discontented and would listen and understand Socialism if it were intelligently presented to them. But the Labour Party and I.L.P. merely advocate reforms that lead nowhere, except that they serve capitalist interests by concentrating the workers' minds on the patching up of the present system, instead of making clear to them the necessity of ending it.

The greater portion of Mr. Villiers' book is taken up with the indebtedness of capitalist governments and the means by which the debt can be reduced or cancelled. On page 84 he presents three main ways of dealing with it.

" 1—To shirk it as much as possible, merely manipulating the taxes from time to time, so as to' provide as long as possible for the payment of interest and perhaps for reducing the principle.
" 2—To repudiate it altogether or in part.
" 3—To devise some great scheme for its repayment either immediately or over a term of years."

With regard to repudiation Mr. Villiers has examined all the arguments except one, and that one, of course, is the most important.

Those who hold the bulk of the war bonds control the political machine. The Cabinet represents their interests, and neither our author nor anyone else will ever succeed in persuading them that it is only justice for them to forego their interests when so many thousands of the workers gave their lives to make the country safe for them.

Heroic measures like repudiation form no part of capitalist policy. Not only so, other wars are expected, and who would lend if the present debt is repudiated ? Moreover, war bonds are a source of income which their holders have no wish to relinquish. The first policy is therefore the most likely to remain.

The third policy, repayment, it is suggested should be by a capital levy. His chief idea is that the stocks and shares now held by capitalists should be transferred proportionately, according to the holdings, to the Government, which would then have an income from which to pay the debt. But if that were all the capitalists might just as well keep their shares and pay themselves with the dividends. They would at least save the expenses of collection and distribution.

The capitalist class and the capitalist government are one in interests and outlook. The debt is owed by the capitalist class as a whole to some of its members. It is the collective responsibility of the capitalist class, and the assets of that class are the means of wealth production, which, operated by the working class, produces the revenue enjoyed by the capitalist class. That revenue will be neither more nor less because some of the shares, or all of them, are held by the Government, If the capitalist class, therefore, adopt Mr. Villiers' suggestion, they would merely be giving up to their executive government annual dividends to be handed back to them as repayment of the executive debt.

Of course Mr. Villiers does not expect the capitalist class to be guilty of perpetrating such a delusion on themselves, but he does think they will allow the Labour Party to do so, or that the Labour Party will accomplish it, they having adopted it as part of their programme.

Debts or no debts, the workers under capitalism can never get more than wages based on the cost of subsistence ; the debt is, therefore, a capitalist debt, must be paid by the capitalist class if paid at all, and is their concern and their concern only.

But what of the Labour Party ? While claiming to be revolutionary it spends its time inventing and advocating schemes to relieve the capitalist class of their indebtedness, to get them out of a tight corner and establish their system on a surer foundation than ever.

If they were really revolutionary they would laugh at the "dilemma of capitalism," and explain to the workers how they can escape from their dilemma—wage slavery—by establishing a system of society where the means of wealth production are owned in common and democratically controlled. Until they do this the Labour Party, instead of being "the hope of the world," are a stumbling block preventing the workers' acquisition of Socialist knowledge. Instilling hope by its sentimental clap-trap, it spreads confusion and breeds apathy in the minds of the workers.

Mr. Villiers dreams of revolution and repayment of war debts at the same time ; but they contradict each other. The one is to overthrow capitalism and the other is to make it solvent. He cannot have it both ways. Either revolution and the abolition of class-ownership in the means of life, and consequently the abolition of interest on war bonds and dividends, and the workers continue to be exploited as hitherto. His failure to deal satisfactorily with his subject is chiefly due to the fact that he does not realise what is meant by revolution and cannot conceive the possibility of a system not based on capital and ownership of capital with all that it implies.

F. Foan

Utopia or Bolshevism? A New Way Out For An Enterprising Government. (1920)

Pamphlet Review from the October 1920 issue of the Socialist Standard

"The Problem of Healthy Towns and a Healthy Industrial System."  By Captain J. W. Petavel, Lecturer on the Poverty Problem, Calcutta University. Reprinted from "The Englishman," Calcutta, for the Calcutta University Poverty Problem Study Fund. 1920.

In this pamphlet Captain Petavel is chiefly concerned with the physical deterioration of the workers as revealed by official documents compiled for recruiting purposes. He says : "As a matter of fact the well recognised causes of this evil are absolutely removable ones ; and though it indeed came to us with our industrial system, and owing to certain conditions that arose with it, these conditions need not have arisen, and could be removed."

What the World Waited For.

But if the Captain's plan is the only solution, the fact that it had to wait for him to discover it disposes of his contention that the evils need never to have been. Obviously the remedy could not be applied until the man was born who discovered it and persuaded those in power to adopt it.

Unfortunately, although referring to the causes as being "well-recognised," the Captain does not explain what they are, and as every party, reformer, and quack has "well-recognised" causes of his own, to fit each particular creed or philosophy, we cannot rectify the omission, and must examine his scheme as he presents it: "a plan to modify our industrial system in order to prevent the appalling physical deterioration for which it is responsible."

The Captain's Muddled Mixture.

This is distinctly unfortunate because the only sensible way to approach any such question is first to trace the evils to their cause and then examine the possibilities of removing the cause.

A further disadvantage is the writer's confusion on the subject of Socialism. First he says that "Socialism, as conceived by its more intelligent advocates, is a plan, not to abolish our industrial system, but to purge it of these evils, " which is what he proposes to do himself by means of his plan. Secondly he points out that "if the propertied class does not promptly deal with the evils they will be giving the workers every excuse to try Bolshevism, Socialism, or whatever plausible plan is suggested to them." But if Socialism is what he previously described it to be why should anybody object? In his mind Bolshevism is evidently something bloody and terrible, and Socialism can be the same—if it is only plausible.

Our reformer's most amusing statements about Socialism, however, are the following.

The Queer Side.

On page 1 he says: "As, however, we are not prepared to accept Socialism, what is wanted is an enlightened public opinion, free from party and class spirit, to demand just what measures are necessary to remove them " (the evils). That again is a repetition of his definition of Socialism together with a statement that we are not prepared to accept it; therefore the only thing left is, to get on with it.

On page 12, after a lengthy explanation of his scheme—which is calculated to achieve what the "more intelligent Socialists" have for their object—the Captain suggests that as there are still likely to be people who are not satisfied with the system and demand Socialism, they should be given the opportunity to establish Socialist communities on a small scale, being provided by the Government with the necessary machinery to carry oat their experiment. But this, he says, "would not really be Socialism, but would be better described as State organised co-operative production." So that what he first describes as Socialism he afterwards denies to be Socialism by providing for Socialism within it, which in its turn is not Socialism but something else !

A Travesty of Socialism. 

Two pages of this work are devoted to "Guild Socialism," which the writer describes as "one of the most picturesque institutions of the past." His description of the way it would work shows the absurdity of this remark. "The Guild undertakes work and divides it among its members, so that all have their share of it and of pay. When there is a great deal of work, all work long hours, when there is less, all work a short time; the more work there is the more money there is coming in, and the guild pays everybody proportionately more."

Nothing is said as to what should determine the numbers to be admitted to each guild ; it being obviously to the interest of every member to keep out new-comers, in order to keep the share-out higher. On a small scale this idea is already in operation in many factories to-day, where the working day is shortened or lengthened in accordance with the state of trade. It is no solution to the working-class "problem." It is not even an improvement, because there is no more to divide than previously. The product of labour is still shared between the capitalists, who do not share in its production, and the workers, who get the meanest and poorest share.

To the latter every plan must be unsatisfactory that includes any provision whatever for a class that rules, yet does not justify its existence.

Capitalists could Ruin—Themselves.

Having seen how confused Captain Petavel is on the subject of Socialism, we shall not be surprised to discover that his ideas on capitalism and capitalists are none too clear, On page 18 he says : "A democratic government has it in its power absolutely to ruin town landlords. It could, on the perfectly sincere plea of public health, acquire large tracts of cheap land away from the towns, and let them out for building at fixed rates, making the railways convey the people to and fro for the smallest coin in circulation."

A democratic government could do these things and many more : but would they ?

Captain Petavel's scheme depends for its finance on a system of heavy taxation of land values ; which he says, by the way, would be no hardship to the landlords, since they could have full compensation.

How this is to be effected and the money still be available to finance the scheme does not appear, unless it is by the same method that the Jersey Corporation adopted when it proposed to build its market hall for nothing. Captain Petavel is enamoured of this scheme, though he tells us why it failed. "The money lenders put the law into operation against it and had it stopped, so that the full advantage was not realised." They evidently saw who would be at a disadvantage, though even now the Captain fails to see that anybody could suffer from a scheme so apparently innocent.

Unconsidered Trifles.

Captain Petavel's scheme is mainly concerned with the material basis of the present industrial system. Social relationships, interests, and class antagonisms are slurred over or altogether ignored. The re-arrangement of towns according to a settled plan, and the improvement of transport are the biggest items on his programme. His idea of town-planning is that the big business houses should occupy the centre of the towns, and that the roads should radiate outwards like the spokes of a wheel. These roads should be wide, with fenced-in tramways and elevated stopping places to bring the cars rapidly to rest and re-start them. Books of tickets should be issued to the workers at rates varying according to the rents they paid, thus ensuring a cheap and rapid service.

These main roads could be occupied by business concerns, stores, etc., while behind them, in the angles formed by the roads converging toward the centre, could be residential dwellings with open spaces, small near the centre, and larger toward the outskirts.

A Bit Late.

Like all town-planning schemes in this country, however, this one is invented after the towns have grown up, and the cost of alterations, together with the serious interference with capitalist interests which it would involve prevents anything being done on a large scale. To meet this difficulty Captain Petavel proposes a tax on land values, every site to be taxed according to the profit made on it, or according to its proximity to the centre of the town. Some would pay the tax and thus provide the cost, while others would take the cheaper sites further out and thus enable the authorities to re-arrange the towns on the new plan.

In towns planned in this way, the space between the roads would, of course, be greater as the distance from the centre was increased. This space could be used for recreation grounds or for agriculture.. The chief advantage, says the Captain, would come to the workers by this arrangement; they could occupy the outlying districts, where vacant land would be plentiful. They could then produce the bulk of their food-stuffs for themselves. Their food would thus be fresh, and it would only be necessary for them to work a very few hours in the factories per day.

The towns would thus be healthier, the workers would spend most of their time in healthy occupations, and only a very short time in the poisonous atmosphere and monotonous tasks of the factory.

The grounds on which the Captain pleads for his scheme are the health and efficiency of the workers. Better health and greater efficiency make for greater production, and therefore higher profits for the capitalist class. It is quite obvious, therefore, that the workers would still be wage-slaves, exploited by a class above them, a class that owns the means of wealth production.

Captain Petavel puts his plan forward as an alternative to Socialism. If he succeeds in persuading the capitalist class to adopt it, the evils of the capitalist system will still remain, because they are bred by the system, and the system remains.

Whatever changes or reforms the ruling class may decide to introduce, the duty of the workers is to organise politically for the overthrow of capitalism and the establishment of Socialism. They must refuse to be side-tracked by reformers, Bolshevik wild men, or Utopians.

F. Foan

Letter: Blind faith in the broad church (1984)

Letter to the Editors from the July 1984 issue of the Socialist Standard

Dear Comrades,

I am writing to you with regard to your opinions of the bankruptcy of the Labour Party as an organisation for radical change, and in particular of the articles "Crisis of the Left" (July) and “Labour in Pain” (August).

The choice before Labour is three-fold: Wilsonian pragmatism, with frontal attacks on working people, the welfare state and unions, all to retain power; revisionist radicalism, primarily attempting to reconcile Labour voters with socialism, not impose it on them; and fundamentalism, not diluting or changing our policies one bit. We have to be realistic in listening to voters' hopes, radical in articulating an alternative system to capitalism’s horrors, and resolute in meaning what we say and making people realise that we will not be blown off by capital, as in 1931, 1948. 1967 and 1976. A little bit of socialism time and time again is better than nothing, and is surely worthwhile in helping radical politics.

May I remind you that in the 1983 general election. Labour on a left reformist programme got 8½ million votes, the SPGB 85 votes, a slight difference. If the dirigisme socialism of Labour, blunted and mellowed by internal contradictions and compromises, is too extreme for voters, they aren't going to vote for a revolutionary Marxist party. Are they? Why not pause and think here; what makes you so sure that eventually the workers will turn to full-blooded socialism?

Ken Coates, in his excellent Socialists and the Labour Party (1973) asks many important questions to revolutionaries which have not been answered by you or theorists such as Miliband, Panitch and David Coates. In Coates' pamphlet, he states the obvious truism that any revolutionary mass party must duplicate “the best features of the old Labour Party . . ." This is for the reason that such a party must draw heavily on former Labour activists, who are at the moment consciously influencing Labour in a socialist direction. The revolutionary left misses the fact that Labour is a living, changing organism, not a monolithic block, and is very susceptible to rank and file activism.

Coates also commented:

Since the collapse of the Independent Labour Party, there has been no group of socialists capable of maintaining a full-scale political presence outside the Labour Party . . . (by which) . . . I mean the ability to secure the election of at least a handful of members of Parliament. . .

So far the history of modern British socialism has involved any group existing outside or independently of Labour and, thus the trade union movement, withering away; no matter whether it was a new revolutionary group as with the Socialist League, SPGB, CPGB. IMG or SWP. or a breakaway from the party—the SDF, ILP. National Labour (the MacDonaldites). Democratic Labour (the Tavernites) and the Scottish Labour Party. Labour, despite the disaster of the last election and its recent record of government, is the only credible representative of the progressive working class. The lessons of the 1880s, 1930s and 1960s, periods of radicalism, must be that the only feasible road to socialism in this country is through the Labour Party.

In “Labour in Pain” (August), you hit on a number of important points about the internal contradictions of the party and hypocrisies of the “Broad Church". Nationalisation of the top 25 companies as the IWC and Labour Conference want, or top 200 as Militant wants, is, as you say, irrelevant. Labour’s paranoid pursuit of public ownership has more to do with Gaitskell’s and Wilson’s opposition to it, than its merits. We have to realise that state control of industries does not alter the plight of workers. They remain wage slaves, no matter their income or material affluence, with no power over the factors of production which decide their lives. State control merely replaces the entrepreneur with the bureaucrat, the capitalist system for the servile state. Workers self-management, or to extend it beyond a narrow industrial front into all walks of life— citizens power, can alter the present undemocratic situation. Citizens power must be built on the ideas of guild socialism and the analysis of human nature and the stale provided by group theory. This must involve seeing the state as an obstacle to radical change, no matter how enlightened those in charge, and limiting its functions and roles. However, it has to be noted, sadly, that guild socialism has been neglected and forgotten about, seen as a throwback to the Medieval age with no pertinence to the industrial age.

The SPGB constitution says it stands for "the common ownership and democratic control of the means and instruments for producing and distributing wealth . . Does this glib phrase “common ownership" mean central planning and state control or "Stalinism plus parliamentary democracy or decentralisation and citizens power over capital? We have a right to know.

The SPGB does, on the other hand, say regularly, and in "Why we are hostile” (November), that all working-class people are "enslaved" and must be "emancipated", not by enlightened Fabian elitists, but the workers themselves. This is fundamentally true. R. H. Tawney in The Acquisitive Society (1921) said:

The workers cannot have it both ways. They must choose whether to assume the responsibility for industrial discipline and become free, or to repudiate it and continue to be serfs.

Workers initiatives, take-overs and local plans, rather than centrally decided blueprints, is the only sure way of avoiding the servile state.

You say that only people who are fully in agreement with the SPGB can join. Your inability to lower the SPGB from its high, puritanical and principled pedestal of fundamental, sacrosanct ideas is sad. Socialist parties desperately need a coherent. dynamic ideological anchor to prevent policies appearing as just a "shopping list" with no underlying philosophy, and to resist the claims of capital. Principles are only of use in relation to short-term policies. You seem to miss this.

The SPGB is a valuable part of the British socialist movement. Labour, for all its faults, is socialist, though as you say in November, most Labourites "belong to a party which they imagine will one day exist . . ." However, if we keep trying, we socialists in and out of Labour can discard the stale heritage of labourism and state socialism. While Marx is still invaluable to analyse modern capitalism, particularly in the surplus theory of value and class critique of production, he cannot be dogmatically interpreted.

Dogmatism is not the answer for socialists. The SPGB should engage in an active, open and free debate with other socialists in the Labour, CPGB and other parties about the failure so far, future and road to British socialism, possibly in the Socialist Society. Any debate must be two-way, with no closed minds. We can learn from one another, sharing our experiences of capitalism and socialist action. You can give us some of your critiques and theories of capitalism, if we can give some, dare I suggest it, flexibility. Remember, together the left has enormous potential to win electoral support and change society. Divided, it has nothing. Despite our numerous differences, which are sincere and cannot be glossed over, we are on the same side—the mosaic of the socialist movement, facing a common enemy, not Thatcher or the Conservatives. but capitalism.

Gerry Hassan 

Dundee

Reply:

The Socialist Party is most willing to engage in "active, open and free debate" with those who call themselves socialists. Repeated efforts have been made to encourage the defenders of Left reformism to take the public platform and debate but, contrary to the impression given in the last paragraph of Mr. Hassan's letter, it is the dogmatism of the traditional left which has prevented them from accepting open debate with the Socialist Party. For example, the leader of Lambeth Council, Ted Knight, was asked recently to debate with us in his own borough and replied that there would be no point in such as event as the Labour Party is bigger than the Socialist Party; our Islington branch has written two lengthy letters to The Militant Tendency, challenging them to debate, but they replied in writing that public disagreement “between socialists” would be embarrassing. So, we would advise our correspondent to write to the Leftist parties and groups urging them to make contact with the Socialist Party; they will meet no dogmatic resistance to discuss ideas from us.

We are reminded that the Labour Party won 8½ million votes in the 1983 general election on the basis of a "reformist programme". What is a reformist programme, be it “left” or "right", but a plan to make capitalism run more efficiently from the point of view of the majority of people in society? That 8½ million workers were conned into believing that a Labour government could do this indicates two things: firstly, there are still plenty of deluded workers around: secondly, there are less workers being taken in by the Labour Party now than has been the case in electoral terms for half a century. The validity of Labour’s ideas is not to be judged by the number of votes they received (on that basis, we would be forced to conclude that the Tories and the Alliance are, between them, substantially more “correct" than Labour), but the extent to which they can be realistically applied as a means of solving social problems. Eight and a half million people voted for Labour’s commitment to the NATO military gang, to the continuation of the wages system, to the acceptance that there must still be poor people for whom the state will have to care. They were voting for capitalism. Our correspondent points to the 85 votes received by the socialist candidate and draws the conclusion that if most voters found Labour's programme "too extreme, they aren’t going to vote for a revolutionary Marxist party". The reason workers did not vote Labour is that they have tried it before and it is no more than another way of voting Tory. Workers did not vote for socialism because they have yet to be convinced that it is in their interests: if there had been no Labour confusion-mongers in Islington South during the last election, making promises to workers which could not be kept, there would have been more votes for socialism. The "workers will turn to full-blooded socialism” when they have had enough of capitalism and are ready to opt for a different way of organising society.

The labour illusion is well summed up by Mr. Hassan when he writes that "A little bit of socialism, time and time again is better than nothing . . .”. Socialism — a system based upon common ownership, democratic control and production solely for use — is the direct opposite of the capitalist system. It is no more possible to have "a little bit of socialism" within a world based on minority class monopoly of the means of wealth production and distribution than it would be to be a little bit pregnant. What the Labour Party’s "little bit” amounts to is a programme to reform capitalism and, as our correspondent rightly points out, these efforts have repeatedly been “blown off by capital". We are told that it is necessary to make people realise that capital will not interfere with Labour’s aims in future, but the Marxist critique of reformism is precisely that such hopes are illusory: if Labour is elected to run capitalism, as it sets out to be, it cannot but bow to the needs of profitability.

Calling in expert witness Coates damages rather than helps the case of our correspondent. What are "the best features of the old Labour Party"? Does he mean their support for two world wars or their racist immigration legislation or their strikebreaking record? Or does he mean their record of reformist promises, such as the promise of full employment made in Labour and the New Social Order or Bevan’s promise that there would be no housing problem in Britain after the Attlee government had served its term? If. by "the best features", they mean Keir Hardie’s statement in the Manifesto of the English Socialists that socialism will entail the abolition of the wages system, then we in the Socialist Party are duplicating the best features, whereas Coates and the rest of the Labourites have ignored the socialist tradition.

After the evidence from the star witness. it is a shame that our correspondent once again returns to the old dogmatic chant that history must go on repeating itself. Evidence points the other way: Labour’s traditional support is crumbling (maybe temporarily, hopefully for good) and workers are looking at alternatives. If “the only feasible road to socialism in this country is through the Labour Party", and if, after seven Labour governments, capitalism is still here, where is the evidence that the road is anything but a dead-end?

We are pleased to note that Mr. Hassan accepts the criticisms made by socialists of Labour and Militant's nationalisation (state capitalist) policies. Indeed, we do "have to realise that state control of industries does not alter the plight of workers” — as the miners will testify. It is a pity that our correspondent's clear recognition that state capitalism is not socialism is not applied to the equally non-socialist theory of "guild socialism", as advocated by reformists like G D H Cole in the distant past. The fallacy of “workers’ control” is based on the failure to recognise that where there is a working class — where wage labour exists as a social relationship to capital — the only result can be exploitative. "Guild socialism" presented a naive plan to decentralise and democratise capitalist exploitation. If it has been "neglected and forgotten about”, as our correspondent states, working-class knowledge will be none the poorer.

We are asked whether our Object implies central planning, Stalinism, or decentralised power over capital. It means none of those things. It would be ludicrous to envisage world socialism as a society run by a bureaucracy on a central plan: clearly, common ownership will require a democracy organised by the majority. We do not advocate Stalinism, and socialism means more than parliamentary democracy: our Object commits us to working for democratic control, that is, the making of decisions about society by its citizens on the basis of full information, as for control over capital, we can only reiterate that there will be no wage labour-capital relationship in socialist society and therefore citizens will no more have power over capital than they will over the banks, the police force or the torture chambers: these social features will not exist.

We are not proposing, then, any "centrally decided blueprints", but will leave it to the workers who establish socialism (who we hope will include us) to make the plans. We agree that most plans can be made locally but, under capitalism, "workers’ initiatives, take-overs and local plans" are constantly inhibited by the fetters of the profit system.

Mr. Hassan's comments about principles invite the Socialist Party to fall into the political pit which the Labour Party is stuck in. We are told that only allowing workers to join who agree with us is "puritanical" and "sad”. We say that letting racists, nationalists, religious cranks. Leninists, pro-NATO supporters, careerists and "Wilsonian pragmatists” into the Broad Church is not just sad. but pathetic; not principled, but disgustingly opportunist.

We are told that “principles are only of use in relation to short-term policies". We have a policy (which is neither short nor long-term, but as long as it takes us to achieve) which is to abolish capitalism and establish a world free of class division, exploitation, property relationships, poverty, war and wage slavery. Those aims are urgent and we are not going to be deterred in struggling resolutely for them by those who tell us to unite with the crumb-collectors of the Left.

How nice to be told that "The SPGB is a valuable part of the British socialist movement". We have been waiting eighty years to meet the other part, but have no illusions that we will find it in the Labour Party or any of the other organisations which seek to re-arrange capitalism. Indeed. “Dogmatism is not the answer for socialists" and that is why those who still hold on to the pathetic belief that Neil Kinnock and his fellow reformists will eradicate the nasty bits of capitalism ought to abandon the Labour Party and join a party which defines socialism with clarity, fights for the new system with enthusiasm and remains uncompromisingly hostile to the apologists for capitalist politics.

Editors

"The Modern Case For Socialism." (1929)

Book Review from the February 1929 issue of the Socialist Standard

"The Modern Case For Socialism." By A. W. Humphrey. Price 12/6. George Allen and Unwin, Ltd.

This book is a welter of confused and contradictory ideas, relieved here and there by some useful information and argument. 

It contains 268 pages divided into nine chapters. The author does not claim to cover the whole case for Socialism. He is wise. But he would have been wiser had he found out what the whole case for Socialism was before he started the book. The title of the book is certainly misleading. It is in no sense the "modern case for Socialism”—in fact, it is not the case for Socialism at all, as more than half of it is taken up with the case for Nationalisation and the so-called "Guild Socialism.” 

The contradictions, omissions and errors, from the point of view of Socialism, are too many to cover in a review, so I can do no more than call attention to a few.

Before doing so, however, I must give him credit for having written some excellent sections on the concentration of capital, the position of inventors, and the nature and ramifications of the trusts, and also some useful information on the wages and conditions of labour, and profit-making at home and abroad.

At the front of the book there is a list of authorities quoted, but it is significant that in this list no mention is made of the most important book ever written connected with the subject, and that book is "Capital,” by Karl Marx. In fact, a glance over this list of authorities drives one to the conclusion that the author has obtained most of his information at secondhand and from pamphlets.

The first chapter on "The Source of Wealth” is fairly clear and fairly simple, but even here the author stumbles. On page 23 we read: "All wealth is the product of labour,” and on page 26 : "The moral law is rooted in the economic truth that labour is the source of all wealth.” The latter may be a very pretty sentence, but it is both untrue and empty. Human energy and natural resources are the source of wealth. The "moral law” is merely an empty phrase. '

On page 24 we read:—

  Labour being, as we have seen, the only creative agency in that process, it follows that Labour is the source of all value.

Farther down on the same page we come across the following:—

  Meanwhile two of the commonest objections to this labour theory of value must be disposed of. One is that land has value but is not the product of labour. Land, however, has value under only two conditions: either it is cultivated, and therefore the value arises from the labour of the cultivator, or it acquires value by reason of the fact that labour carried on in its vicinity creates a demand for it.

There is, surely, a manifest contradiction between these two quotations. If "labour is the source of all value,” how can land upon which no labour has been spent have any value? It cannot, and has not. The author confuses value and price in the second quotation. Land upon which no labour has been spent may have a price, but it has no value.

A few pages later on the author confuses profit with surplus value, as if the two were identical. Under the heading "How Profit Arises,” on page 28, we find:—

   Thus supposing the working day to be of eight hours, the worker may produce the value which he receives back in wages, in say, three hours, and the results of his work during the remaining five hours are annexed by the capitalist. The value created in this five hours is the surplus value, or profit, which the worker is compelled to leave in the possession of the capitalist.

The remaining five hours mentioned is surplus value, but all of this is not profit. Out of this five hours the Capitalist pays rent, interest and allots an amount for future production as well as taking his profit. The profit a given Capitalist concern makes (leaving aside for the moment any hidden or artificial reserves) is the amount they have over during a particular period of trading, after making allowances for necessary sinking fund, duties payable, ground or other rents, royalties, honorariums and other tributes to other Capitalists, besides advertising, etc., expenses, all of which come out of the surplus value produced by the workers in the particular concern.

Now, according to the quotation given above from page 28, the difference between what the worker gets and the value he produces is surplus value. On page 46 the author gets himself into a tangle again, with the following astonishing statement:— 

   The trade unions and the Labour Party are the means by which the workers defend their portion of the surplus value produced by their labour and strive to increase it.

We would assume that there is a printer's error here, but taken in conjunction with other matter in the book, we are forced to the conclusion that it is only an expression of the author’s lack of grasp of economics, of which there is plenty of evidence throughout.

However, perhaps the few points mentioned from the opening sections are a sufficient illustration of the character of the author’s analysis, and we will only take one or two points that occur later on in the book.

From page 142 we take the following:— 

  The banks do create credit; by creating credit they increase the supply of money, and thus influence prices and the volume of production . . . .
  Money exchanges for goods. If the volume of money increases without a corresponding increase in the quantity of goods, then money, considered in relation to goods, will have declined in value. Because money has declined in value a given quantity of money will not exchange for the same amount of goods as formerly. To purchase that amount of goods more money will be needed, which is another way of saying that prices will rise. This is what in fact does occur. An increase in money without a corresponding increase in goods brings about a rise in prices. An increase in the quantity of money is called an inflation of the currency. Thus, we reach the position that inflation causes a rise in prices.

He then reverses the process to show a reversed result.

It is all very neat and pretty. However, neat arguments are not necessarily sound arguments.

In the first place, a mere increase in the quantity of money is not an inflation of the currency. An inflation of the currency can only occur under certain special conditions, which include weakness in the backing behind the currency. Now if there is one thing that practically everybody accepts to-day it is that crises, and in recent times the crises in the cotton, steel, shipbuilding and other industries, are brought about by the expansion of production beyond the effective demand, bringing in its train a fall in prices. Increased credit facilities have been blamed, in the main, for enabling manufacturers to flood the market. In consequence there is an all-round whine that prices are ruling too low, and Capitalists are looking to "rationalisation” as a royal road out of this difficulty.

The main trouble, however, is that Mr. Humphrey is confusing credit facilities with currency. Money has many functions, and one of these functions is to act as' currency. Before he started upon this neat little argument he should have shown how the volume of money that acts as currency is increased.

His confusion on this point leads him to the statement that:—

  The increased development of the use of credit in carrying on industrial operations has made the banks the controllers of the volume of money, and, therefore, in some degree of prices, which in turn affects the balance of trade. (p. 150.)

And also:—

   The banks keep their balances at the Bank of England, and in the last resort their lending powers rest on the Bank of England's gold, but this gold basis has for years been declining in importance, and to-day is of little significance, (p. 145.)

On the same day that this review was being written the writer read the annua) report of the Chairman (Mr. F. G. Goodenough) of Barclays Bank. From this report the following extracts are taken bearing upon the above remarks:—

  Another important factor affecting industry and trade has been the stabilisation of currencies in terms of gold by certain countries, and especially France, during the year. It may now be said that for all practical purposes the stabilisation of world currencies on a gold basis has been virtually completed, and this should prove a factor in the stabilisation of price levels as between one country and another. 

#    #    #    # 

It is provided by the Currency and Bank Notes Act, 1928, that the Bank of England and the Treasury acting in agreement, may reduce the fiduciary limit as and when they may think fit, while provision is also made for an expansion in the fiduciary limit should the circumstances warrant. The power to reduce the fiduciary circulation would probably be utilised if, after a period, it was found that the currency available was permanently in excess of the country’s needs, as, for example, might prove to be the case in the event of an appreciable and permanent fall in price levels.

(The Sunday Times, 20/1/29.)

("The fiduciary limit’’ means the quantity of bank notes that may be issued without a gold backing )

In other words, the gold basis is very much in existence, and trade only absorbs the amount of currency required to facilitate business transactions, the rest lies in the Bank. This disposes of Mr. Humphrey’s illusion that currency is a fixed quantity which is split (gawd knows how!) in certain proportions over the goods being sold at a given moment. As a matter of fact, he is only bringing to life again the hoary old quantity theory of money which has been destroyed time after time.

The aim of his argument is shown in the climax. He is out for the nationalisation of the Banks. In fact, the last hundred pages of his book is mainly occupied with a glorification of nationalisation. As the subject has been often dealt with adequately in these columns during the last few months we will not pursue Mr. Humphrey on the subject, where he frequently mixes public ownership with Socialism and has a good deal to say about that mysterious entity, “the public ”!

In the opinion of the author, Socialist theory will be put into practice by the Guilds. And this is how they will do it:—

  The Guilds in being, there would fall to them the duty and privilege of running their respective industries. The Guild would decide the methods; it would be the owner of what was produced; it would divide the proceeds' of the sale of its products among its members, according to principles and rates of pay which the members themselves would lay down. Out of its income the Guild would make provision for the maintenance of its members in sickness, unemployment, and old age. (pp. 256-257.)
  The factory, mine, shipyard, or other centres of production would be the natural and fundamental unit of industrial democracy. This involves not only that the factory must be free, as far as possible, to manage its own affairs, but also that the democratic unit of the factory must be made the basis of the larger democracy of the Guild. The duties of the larger organisations of the Guild would consist chiefly of co-ordination of the production of the various units, making general regulations, supplying raw material, selling such products as were not disposed of locally, and representing the Guild in its relations with other Guilds and the community as a whole, (p. 258.) 

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As to the all-important question of prices, the instrument of taxation would be a means of checking any tendency on the part of a Guild to overcharge, supposing that in any instance or at any time the decisions jointly made with the State were not loyally observed. For taxation would be levied not on individuals but on Guilds, and as justice in taxation implies that those with most shall pay most, a Guild getting unduly wealthy by keeping up prices would And that its excessive surplus was skimmed off by the State for communal purposes.
  The main point to be grasped at this point, however, is that, though the community would have the right to intervene in matters affecting the general welfare, the internal affairs of the Guild would be a matter for the Guild alone, (p. 261.) 

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At this point it may be as well to make clear that it is not imagined that under the Guild system we should find the whole population to the last man in Guild membership. There is, for example, the case of artists and fine types of craftsmen. No one suggests that any such workers should be forced into a Guild against their will. They would, in all likelihood, be able to make an ample living working independently, for with the higher standard of living and of education which would be the rule in Socialist society, there would be a much greater demand for all beautiful things than there is to-day. (p. 262.)

Now, gentle and unsophisticated reader, you should have an adequate idea of Mr. Humphrey’s conception of Socialism, and therefore the value of his book as a contribution to the “Modern Case.” As you see above, there will be privileged classes, taxation, buying and selling, high and low prices, and other bric-a-brac of Capitalism ! as we know it to-day.

Gilmac.

"The House of Industry." (1931)

Book Review from the December 1931 issue of the Socialist Standard

The House of Industry by S. G. Hobson (Pub. P. S. King & Son, Ltd., price 1/-, 112 pages).

Mr. S. G. Hobson, who has in turn been a member of the I.L.P., a Fabian, and an advocate of Guild "Socialism" has written a book in which he advocates workers’ control. This is to become effective by superseding the House of Lords by a "House of Industry,” which will have full legal authority from the House of Commons to control "all industrial processes, including banking, finance, credit and insurance; and in which labour will have a permanent majority.” The members of the "House of Industry” are to be elected by economic groups and to be representative of all factors. Needless to say Mr. Hobson does not propose dispossessing the capitalist class. He proposes that shares should be changed into "some form of debentures” bearing a fixed rate of interest.

The problems of Capitalism are very simple matters to the "House of Industry.” Unemployment will be solved by "increasing wages, adjusting economic factors, by co-ordinating industry and controlling credit.” How it is going to be done or how the details will work themselves out we are not told. We are left to believe that the magical formulae, "Control of credit ” . . . "finance” . . . "co-ordination of industry,” etc., etc., which are repeated almost on every page, will perform the miracle.

The most interesting part of the book is perhaps the foreword contributed by two prominent Trades Council officials, A. M. Wall and A. A. Purcell. Concerned because the Labour Party has forsaken its policy of Nationalisation (see June S.S.) in favour of Public Utility Companies, they advocate support of Mr. Hobson’s proposals for "workers’ control” through a "House of Industry” as outlined in his book.

"The politicians,” they say, "are actively engaged at this moment in legislating away their control over industry . . .  We need only instance the creation of the Electricity Commission and the proposed new authority for the passenger transport system of London as illustrations of this tendency on the part of Parliament to give away its control of economic affairs.”

They continue:—

   The indications are that a decade of legislation under Labour Governments will give us a whole group of independent corporations of this type, administering railway and road transport, electricity supply, the cotton textile industry, and probably others. These concerns will not be, as the Post Office organisation is, under Parliamentary control, administered by Government departments, and with responsible Ministers at their head. If the proposed new transport authority in London is to be taken as a model, questions of wages and conditions of employment will be handled by these new bodies in exactly the same way as any powerfully organised capitalist-controlled industry handles them now. Trade Unions will negotiate with these boards of Commissioners as they now negotiate with employers' organisations; and the policy of the board in dealing with the Unions cannot be any more effectively challenged in Parliament than the policy of any capitalist organisation of employers can be challenged to-day. Labour members who are returned to the House of Commons at the expense of the Unions by working-class votes as Members of Parliament, will be as powerless to protect the interest's of their organisations whose members are employed under these corporations, as the group of miners' M.P.s are to protect the workers in the coalfields under capitalist ownership. Our Labour members, in fact, who are consenting to the creation of these corporations, are not only voting away their usefulness as Union watchdogs : they are legislating against the workers' control of industry. And if anybody alleges that the principle of workers' control will be safeguarded by the inclusion of one or two prominent trade unionists among the commissioners we can only say we do not agree. We take leave to say further that anybody who thinks the appointment of a Trade Union representative on one of these boards is a step towards workers' control understands neither the meaning of workers' control nor the purpose of Trade Unionism.

It will be seen that Mr. A, M. Wall and Mr. A. A. Purcell both vigorously denounce Mr. Morrison’s and the late Labour Government’s London Passenger Transport Bill. They represent it—quite truly—as the abandonment of the Labour Party’s old policy of Nationalisation. But is there any fundamental difference between these proposals? The difference is merely one of form. In the case of Nationalisation control is vested in a State Department; in the case of the Public Utility Trust in a Committee of business men who are responsible to a State Department. In the case of "workers' control,” on the lines of Mr. Hobson’s proposals, control would nominally be in the hands of elected officials. In each case, however, the capitalists still retain ownership, and perhaps more securely than ever. Instead of their shares being liable to considerable fluctuations in the open market and to possible complete loss, they are to receive a fixed rate of interest on bonds having Government backing.

Public ownership in any of these forms is capitalism in a new garb. The defect about these schemes is that they do not so much as touch the fundamental problem of the workers. What is the problem? It is that we live in a world where the means of production and distribution are the private property of the capitalist class. The workers produce everything that is necessary for the sustenance and continuance of society; the capitalist class own it. The workers receive wages based roughly on what it costs them to live and be efficient, and bring up families. The capitalist class keep the remainder. It has been calculated by a Liberal economist, Professor Henry Clay, that one-twentieth of the population own between them five-sixths of the accumulated property, land, buildings, shares, etc., and retain every year nearly half of the total product of industry. That is the workers’ problem. That is why they are poor. There lies the cause of unemployment and wars. The solution is that the means of production and distribution should be made the common property of society as a whole. When that has been done there will no longer be a working class, producing wealth but not owning it, and a propertied class owning-wealth but not producing it. That will be Socialism. Nationalisation, Public Utility Companies, etc., do not solve that problem. They leave the property owners still in possession of their property rights, still able to live at the expense of the producers.

The only difference is that they exchange shares in a private company for shares in a public utility company, or for Government securities. The workers are more or less where they were before, getting just enough to exist on, and faced with all the harrowing problems of how to make ends meet. Changing the form of capitalism from private companies to State-controlled concerns is a problem of interest to the capitalist class, the form of whose property is being changed, but it is not a question that is worth the attention of the workers.

Harry Waite