So They Say: Labour's guidelines for Capitalism (1975)

The So They Say Column from the March 1975 issue of the Socialist Standard

Labour's guidelines for Capitalism

Following his meeting with the Chairman of the Confederation of British Industry in January, the well- known non-Socialist, Mr. Denis Healey, has been increasingly forcing some of the facts about capitalism and how the Labour Party proposes to run it down the throats of the working class. Speaking at the Electrical Contractors’ Association in London on 11th February, he said:

If we price ourselves out of jobs by excessive wage increases, there will also be even greater cut-backs in new plant and machinery. That too means more men and women out of work, both now and in the future. None of this need happen. It will not happen if workers, not just in the union headquarters but on the shop floor too, stick strictly to the guidelines for wage negotiation laid down by their own leaders in the TUC last year.

We recall the uproar in the House of Commons not long ago when Labour MPs were clamouring for remedial action to be taken after British companies were found to be paying black South African workers below “officially recognized” levels. The Labour Party has consistently subscribed to the utopian view that wages can be fixed at some “fair” level which will be mutually beneficial to both capitalist and worker. Such a view has nothing to do with Socialism and we advise members of the working class to examine and reject the concept that a system of exploitation can be run “fairly.”

Closing his eyes and opening his mouth

Before Mr. Heath reluctantly vacated his position as leader of the Conservative Party in February, he put forward as neat a piece of mumbo-jumbo as one might expect. In a desperate attempt to appeal to all men everywhere, he undertook a dazzling rebuttal of the view that capitalist society is divided into two classes. Speaking on his ability to lead the Conservative Party he said:

It is not just a question of looking after the middle class, which of course has very great problems particularly under this Government, and we should do our utmost to help it. But it is not just a question of class at all. I loathe the word class. I do not believe in class. It is a question of ensuring the prosperity of the nation in which everyone can share.

(Financial Times, 31st Jan. 75)

Well, Mr. Heath may not believe in it, although after almost ten years as leader of the Conservative Party he has had as good an opportunity as most to realize that the interests of the workers and capitalists are opposed, but his beliefs are neither here nor there. The class position of the individual is not determined by the beliefs of anyone, but by the relationship between that individual and the means of production. Whatever aspirations some individuals may hold to the contrary, those members of society who do not own any of the means of production or distribution form the working class. This is the vast majority of the population and it is through their efforts alone that the “prosperity” Mr. Heath refers to is created, not for the benefit of “everyone” as he would have it, but for the benefit of those individuals who do own the means of production and distribution, the capitalist class.

A Goodly Wizard

One of the inevitable reactions to the continuing barrage of propaganda from the capitalists that Britain is going bankrupt, that this crisis must be surmounted, that we must all make sacrifices — ad nauseam, is that the heavenly thoughts of the Christian sorcerers get another outing. They are always at hand to tell us that “God moves in mysterious ways”, but the reality is that whichever way he moves, it always seems to serve the need of the capitalist class. This is no accident, there being a clear link between the scriptural injunction “Servants obey your masters” and its application to the working class.

The Very Rev. Horace Dammers, the Dean of Bristol, has recently launched a movement entitled “Life Style” which apparently already has several hundred members. The Dean underlined the Christian ethic of frugality (for the workers) so much beloved by the ruling class through the ages:

I think we have found a realistic way for ordinary people to make a positive contribution to the good of mankind.

Apart from monthly meetings where the members get together in order to “analyze each other’s incomes” or discuss ways of “using their money in ways which they consider to be less socially harmful”, some members are

planning to share cars and lawnmowers, and to cut down on food and insurance, and are thinking twice before buying new clothes, and even pets.

(Sunday Telegraph, 2nd Feb. 75)

If the Dean genuinely wishes to make a “positive contribution to the good of mankind” he should exorcise this bogus brotherhood, and start to study Socialism.

Honest Profit

It is usually advantageous for capitalists and the politicians representing their interests to refer as little as possible (in public) to the mainspring of capitalist production — Profit. Some appear to view its mention with a hurt concern, preferring to talk about the “creation of prosperity,” or “economic growth.” Others are more brazen:

No-one now believes that profit is a dirty word, if profit is honestly earned and put to proper use.

(Mr. Denis Healey speaking at the CBI’s annual dinner at the Hilton Hotel on 14th May 74.)

However, according to a report in the Financial Times on 11th February, ICI is one company which is afflicted with a certain "self-consciousness” in this regard. The fact that the company had produced a profit of £375m. over nine months caused the Public Relations Dept, of ICI to commission a survey from Documentary Research of Bristol, in order to gauge possible public hostility toward profit announcements. The survey team interviewed 1437 people and one of its findings was:

There appeared to be no understanding of the fact that a very high percentage of profit was paid out by companies in tax; only 6 per cent acknowledged that tax was paid at all.

As a result of these findings ICI laid new emphasis on tax in its financial advertising both internally in the company newspapers, and in the National Press.

All good stuff for the Public Relations men to play up at every opportunity. We can imagine the copy now — "Yes the profits may look big, but you want to see the size of our tax demand.” Nevertheless we place no importance on the amount of tax a company pays. The report went on to say:

There is no great antipathy towards profits. ‘We might not have put profits at the top of our advertisements before,’ said ICI. But the survey has shown up some other areas of misunderstanding and mistrust which will take more than simplified advertising campaigns to overcome. There are strong suspicions that results are not presented honestly.

The newspaper report concludes:

One wonders, would the results (of the survey) have been different if the respondents had been less ill- informed about the ultimate destination of profits?

Its ultimate destination is irrelevant to the working class who have created this surplus-value. By the time Profit is counted, the worker has been paid. What workers should usually do is not concern themselves where Profit goes, but to examine where it originated.

Specialist Purposes

An explanatory note on the Times report of 6th February regarding the Ingram 9mm. sub-machine guns recently purchased from the USA by the Ministry of Defence is required:

The Ingram is said to be well suited to undercover operations. But the ministry is emphatic that the guns, bought for “specialist purposes” have not been used in Northern Ireland. The silencer differs from the conventional kind. Instead of slowing the bullet as it leaves the muzzle it allows it to reach full supersonic speed. The enemy would hear a crack as the bullet passed him, but it would be impossible to tell where it came from.

We can reveal that the “specialist purposes” to which the Ministry vaguely refers are that the guns will be issued to those members of the working class within the British armed forces so that they may fire them at other members of the international working class when the interests of two groups of capitalists collide. The report is misleading in suggesting that “the enemy would hear a crack as the bullet passed him”. This defeats the purpose of the bullet — the truth is that the “enemy” would hear nothing as the bullet passed through him.

Alan D'Arcy

Fallacy of a National Incomes Policy (1965)

From the August 1965 issue of the Socialist Standard

The Prime Minister, Mr. Harold Wilson, has confessed that though he dipped into the writings of Karl Marx, he never got anywhere with it. If he had persevered he would have discovered that Marx knew about the problem which Mr. Wilson and his ministers are trying to solve with their Incomes Policy. Not that Mr. Wilson is an innovator in this endeavour, except that some of the descriptive names are different: “wage freeze”, “wage restraint”, “pay pause”, etc., have given place to “planned expansion” and the laying down of “criteria” for price reductions and avoidance of increases, and for keeping wage rises (with certain exceptions) within the rate of annual expansion of production—at present about 3½ per cent.

But before the present hopeful contestant, Mr. George Brown, entered the ring, there were others—Mr. Selwyn Lloyd in 1962, Mr. Thorneycroft in 1957, Mr. MacMillan in 1955. These were all Conservative Chancellors of the Exchequer. Earlier still there was the late Sir Stafford Cripps under the Labour government after the war, and both parties, and the Liberals, were sponsors in the War-time National government of the 1944 White Paper on Employment policy, which stated the problem and specified what they hoped were the lines on which it would be solved.

These separate income policies are divided by several years. Governments do not have to worry about a policy for prices and wages when unemployment is considerable.

What then is the problem? In the past 20 years it has come to be known as “Stop-go”. Each of the half-dozen Tory Prime Ministers has been chided by the Labour Party with so mismanaging affairs that periods of expansion and low unemployment have regularly been followed by a crisis, by falling or stagnant production, and a rise of unemployment. Each of the governments announced its intention of making expansion continuous and each time the Labour Party said that the government did not know its job and was doing the wrong thing. We are hearing this type of propaganda again now, from the Tories, who failed to control the situation when they were in office.

Marx described the situation briefly and pointedly just 100 years ago in a paper presented to an international Congress in September, 1865: —

“Capitalistic production moves through certain periodical cycles. It moves through a state of quiescence, growing animation, prosperity, overtrade, crisis and stagnation (Value Price and Profit Chapter XII).”

There were various reactions to Marx’s statement; that it wasn’t true; that it had happened but would not be allowed to happen again; that it was due to the greed and stupidity of the employers—and all these could be cured. The Labour Party, which first inclined to the view that the periodic crises were the fault of the employers has, since it became the government, veered to its present attitude—that a strong lead from the government to both employers and workers will put things right and keep them there. They are claiming to be able to do now what they and the Tories alike have failed to do and which nobody succeeded in doing in the past. Looking only at the period since the Second World War, annual average unemployment has been as high as 612,000 (1963) and as low as 287,000 (1956), with the monthly figures ranging from under 250,000 to over 900,000. Production has followed a similar course, with bursts of rapid growth followed by decline and periods of stagnation.

The question to be answered is “Why does this happen?” Why does expansion always get checked? Why do booms lead to crises? Basically it is because we live under capitalism. in which the great majority of people can get their living only by selling their mental and physical energies to an employer for wages or salaries. Under this system the propertied class—who live by profit, rent and interest—and the working class, are dependent on the market, on the ability of the owner of the products of industry to sell them at a profit. The mechanism through which all this goes on is that of money and prices.

Capitalism produces nothing directly and freely for the use of those who need it. If you are homeless or near starvation you will not get a house or food; you have to have money to pay for them. The manufacturer who cannot sell what his workers have produced, either because his competitors have produced more cheaply and have captured the market or because the product is no longer wanted (for example, coal being replaced by electricity or oil, or man-made fibres replacing cotton, silk or wool), or because his would-be customers have no money, has to sell at a loss and may end in bankruptcy and his workers join the unemployed.

But, say the “planners”, why cannot each line of production be accurately planned ahead so that nothing is produced in excess of the demand for it and nothing is produced for which there will turn out to be little or no demand? This is a deceptive hope. In a boom, when there are prospects of a big unfilled demand, capitalists (including the State industries)—not just in one country but internationally—hasten to expand and modernise their factories to capture as much of the market as they can. They simply have to do this; if they stand still they fall out of the competitive race. In some fields natural conditions defeat the planners anyway. Who can plan good harvests? or foresee and prevent the sudden discovery of vast and easily accessible supplies of oil or natural gas in the Sahara or the North Sea?

In a boom manufacturers are all competing to buy raw-materials, machinery, factory buildings—and to hire workers; collectively, they are trying to buy more materials and hire more workers than there are available. In these conditions, sellers—including the workers who are sellers of their labour-power—can put up prices, and do so: which brings us right back to Mr. George Brown and his predecessors, their policies for incomes and prices—and their problems. (Incidentally this is a universal capitalist problem not one in Britain alone. One same issue of the Times, April 28th, reported emergency measures including the attempted freezing of prices in Yugoslavia, and the American steel workers and employers arguing about a wage claim in the light of the Federal Government’s “Anti-inflationary guiding figure of 3.2 per cent”).

What then are the choices before Mr. Brown and other planners? If they let things take their course the boom runs into difficulties; in some fields through scarcities of materials (for example, the recent shortage of bricks) which hold up production, and in others, sooner or later, of overstocking of the market for certain products.

How logical it must look to Mr. Brown to try to prevent the collapse of the boom, by using persuasion and threats to damp down the rise of prices and wages. But is this a practicable policy? In conditions which enable sellers to push up prices and in which workers are favourably placed to push up wages, can government policy prevail? Past experience, the Stafford Cripps era, shows that it may have some effect for a time. But Wilson and Brown have to remember something else. Capitalism is a class society and the working class do not accept that any particular level of wages or profits is a proper and satisfactory one. Without clearly understanding that they are the producers of all the wealth which the capitalists own, they nevertheless always feel that they have a good case for getting a larger share of it. So before long their resentment turns against the government which is trying to induce them to go slow on wage claims: the national incomes policy of the Labour or Tory government finally breaks on the class nature of capitalism.

All of this Marx understood very well a century ago. It may be said that much of what he saw about the ups and downs of production in the market is now common knowledge among economists, but his insight was greater than theirs. Many of them, including those who toy with the idea of permanent and even expansion, think that expansion, because it is desirable is therefore “normal”, and that the interruption of expansion is a fault or failure, due to avoidable mismanagement or to the greed of some group or other. Marx, in his objective analysis of capitalism, viewed it differently. He saw that the expansion, the crisis and the stagnation are all “normal”, they are the way capitalism operates because of its own nature. Prices and wages rise in a boom because that is how capitalism with its prices system functions.

Marx did not share one error which is common to all his critics. They think that the problem is one of modern production; he saw that it is a problem of capitalist production—a very different proposition. Did he, because he understood it, have a solution to offer? A solution within capitalism? No! A solution without capitalism? Yes!

If Mr. Brown’s policy is bound to run up against the laws and the class nature of capitalism, Marx also saw that the opposite to Mr. Brown’s policy offers no way of avoiding a crisis. He dealt specifically with the notion that higher wages would solve the problem of unsaleable goods by enabling the workers to buy more. Apart from other inevitable disharmonies of capitalist production and selling as between the production of the means of production and the production of consumer goods he knew that a general rise of wages at the expense of profits would, while increasing the demand for working class necessities, at the same time reduce the demand for capitalist luxuries, and necessitate a curtailment of their production. He wrote: —

“It is purely a tautology to say that crises are caused by the scarcity of solvent consumers, or of a paying consumption. The capitalist system does not know any other modes of consumption but a paying one, except that of the pauper or the “thief”. If any commodities are unsaleable, it means that no solvent purchasers have been found for them, in other words, consumers (whether commodities are bought in the last instance for production or individual consumption). But if one were to clothe this tautology with a semblance of a profounder justification by saying that the working class receive too small a portion of their own productivity and the evil would be remedied by giving them a larger share of it, or raising their wages, we should reply that crises are precisely always preceded by a period in which wages rise generally and the working class actually get a larger share of the product intended for consumption. From the point of view of the advocates of “simple”(!) common sense, such a period should rather remove a crisis. It seems, then, that capitalist production comprises certain conditions which are independent of good or bad will and permit the working class to enjoy that relative prosperity only momentarily, and that always as a harbinger of a coming crisis.” (Capital Vol. II. P.475).

Fundamentally crises can happen only because of capitalism, under which the workers’ continued employment depends on each part of the productive apparatus (production of means of production, production of necessaries and production of luxuries) keeping in line with every other part. As Marx wrote elsewhere:

“The last cause of all real crises always remains the poverty and restricted consumption of the masses as compared with the tendency of capitalist production to develop the productive forces in such a way, that only the absolute power of consumption of the entire society would be their limit.” (Capital Vol. III. Page 568).

Marx’s critics do not believe this. They believe that by some means or other they can keep each industry in line with the others, and with the demand of the market at home and abroad, without overproduction in one part of underproduction in another, without the production of unsaleable goods, and without disturbance from rises of prices and wages and fluctuation of employment.

They have been trying, without success, for a century or more. Why do they not turn their attention to the way out, that of having Socialism instead of capitalism?

Edgar Hardcastle

The Crisis: Capitalism’s Stranglehold on the Labour Government (1975)

From the August 1975 issue of the Socialist Standard

There is of course nothing new in governments breaking pledges and turning policy somersaults, but latterly the occasions have become more frequent and more farcical. At every election since the second world war the Labour and Tory parties have undertaken to deal with inflation: to so little effect that prices have risen continuously for thirty years, with the rate of increase getting faster and faster.

It is not at all surprising that this should have happened because the governments have been running a policy of inflation in the belief that this was a way to prevent unemployment from increasing. A vain hope, because at each of the half-dozen recessions since 1950 unemployment has risen to a new higher peak—over a million in 1972 and now forecasts of a possible 1½ millions by early 1976. Instead of stopping inflation, it has been government policy first to promote it and then to try to suppress its symptoms by means of a “Prices and Incomes Policy”.

It started in 1947 under Attlee’s government and has been re-enacted half a dozen times. A long succession of failures as far as stopping inflation is concerned, but it would be churlish not to acknowledge its one happy achievement—the enrichment in the use of our vocabulary. We have had wage restraints, wage freezes, wage thaws, plateaus, pauses, ceilings, guiding lights, norms, standstills, early warnings, guide-lines, slow-downs, explosions, wage-stops, thresholds, curbs, social contracts, and a lot more.

The latest from Mr Wilson “the £6 limit on wage increases”, which he admits means a lower standard of living, has a novel refinement. For years the centrepiece of the Labour programme was the “national minimum”. The law was to be used to force “bad employers” to become “good employers” by making them put wages up. Now Mr Wilson threatens to use the law to prosecute employers who put wages up too much. They are, he says, “rogue employers”. The recipients, of course, could be workers whose wages are only a small fraction of Wilson’s own income.

Don't they understand capitalism?

Is it really possible for government ministers not to understand how capitalism operates? And to be unaware of the inevitable consequences of their own policies? Indeed it is possible. During the nineteenth century, although capitalism regularly went through the recurring cycle of expansion, boom, crisis and depression outlined by Marx as the economic law of the system, governments, capitalists and many economists were forever expecting booms to be permanent and being amazed as each crisis blew up. There are plenty of similar examples in our own times.

Any serious student of capitalism knows that the capitalist is in business to make a profit and therefore will not invest more to expand production at those times when there is no prospect of selling the product profitably. Yet in the last recession, in 1971-2, Heath and Barber complained bitterly that though for months on end they pleaded and threatened and offered inducements for increased investment, “nobody would listen”. Healey, Chancellor of the Exchequer in the present government, confesses to having been equally ignorant of the facts of economic life. “One thing I have learnt from my experience in the past seven months [as Chancellor]: there is no chance of investment if business expects a general and prolonged recession, however generous the tax incentives” (Report of speech, The Times, 5th October 1974).

Later in the same month he was again airing his ignorance, this time as guest speaker at the Lord Mayor’s banquet for bankers and merchants of the City of London:

I simply cannot understand how it can make economic sense . . . to keep a million active men and women idle when the nation needs the goods they could produce (Times, 18th October 1974).

Since when has capitalism been interested in meeting people’s needs? And, in a depression, who needs additional production of unsaleable cars, motor-cycles, supertankers, steel and so on?

In one respect nineteenth-century British governments were better informed than governments since 1945. They knew how to prevent inflation and decided that it was in the interest of capitalism to prevent it. There was no inflation for the hundred years before 1914. Prices rose and fell by moderate amounts in booms and depressions, but the level was lower in 1914 than in 1814. Now the price level is more than seven times the 1938 level and rising fast, by far the biggest cause being the depreciation of the currency consequent on government policy.

There were always some uninfluential groups advocating inflation to cure the ills of capitalism. One was dealt with in the Socialist Standard in August 1906. Using the Marxist analysis the writer of the article showed that it would cure nothing and would simply raise prices: “the workers, as is usual, being the first to suffer”. Another example is mentioned in The Life and Times of Ernest Bevin, by Alan Bullock (p. 17). Bevin, trade union leader and later a minister in the Attlee government, was present in 1908 at a conference to discuss remedies for unemployment. One proposal was “the issue of paper pounds”. A Liberal politician who was there thought that it was “very sensible” but politically impracticable.

After 1945 it was quite different. Influenced by Keynes (or by crude distortions of Keynes) the Labour and Tory Parties and the TUC adopted the doctrine that the government could “manage” the economy in a way that would prevent crises and depressions occurring again. By “maintaining demand” they believed they could always prevent unemployment. Maintaining demand meant in practice printing more money and putting up prices. Keynes, whether he intended it or not, had made inflation respectable.

Marx and others on inflation

A number of economists in the past have understood that if an inconvertible paper currency is issued in excess amounts it will correspondingly put up prices. Marx’s special contribution was to anchor it to his theory of value. In given circumstances a certain amount of currency will be required. If the currency consisted solely of gold coin it would represent a certain total weight of gold and therefore a certain total mass of value. If the gold is replaced by inconvertible paper money (not convertible into a fixed weight of gold) and is then issued in amounts exceeding the gold it represents, it will simply put up prices. This is the present situation. Currency in Britain in 1938 was under £500 millions. It is now over £6,000 millions. It went up £825 millions in the year to July 1975.

Those who reject this explanation of inflation can apply a test. Let them show when such excess issue took place without raising prices; or when such excess issue was halted and prices did not fall.

In December 1919, after a very fast rise in prices, a ceiling was placed on the note issue and within a year prices were falling fast and wages with them. Lord Rothschild (Times, 30th June 1975) recalls that German inflation was halted in 1923 by applying the recommendations of a Committee (two members of which were the banker Brand and the economist Keynes) which included the Reichsbank being “forbidden to print more notes”.

Some modern “monetarists” have confused the issue by trying to relate price movements to the total of currency plus some or all of bank deposits. Why should the act of lending by depositors to banks affect the price level? Historically there is no justification for the theory. The enormous growth of bank deposits in the last decades of the 19th century was accompanied by a fall of the price level, not a rise.

Harold Wilson used to be quite confident about how he would prevent inflation. In 1957 some of his articles in The Guardian were published as a pamphlet, Remedies for Inflation. In Section III “What Labour Would Do” he wrote:

Ever since the Coalition Government’s White Paper (Employment Policy, 1944) all major parties have been committed, on Keynesian lines, to using the Budget as a means of avoiding undue inflation or deflation. In inflationary times, therefore, all are agreed in theory on the need for public saving through a large Budget surplus, though we have felt that a number of Conservative Budgets have sacrificed financial stability to a desire for fiscal popularity.

In practice Wilson’s government in 1974-5, instead of running a Budget surplus, has shown the biggest deficit in British peace-time history. Wilson says that the Government’s latest measures have been forced on it by the threatened drastic fall of the pound under pressure from foreign holders of sterling, just like Labour Premier Ramsay MacDonald in 1931.

There is no sign that the bulk of the Labour ministers and the TUC have given up their delusion that unemployment can be prevented or reduced by a further round of “reflation” (their name for inflation). But at the moment Wilson, after years of promoting inflation because he thought it would prevent unemployment, is now declaring that inflation causes unemployment.

Some of his critics in the Labour Party and trade unions (including apparently Mr Scanlon, leaders of the engineers), think they have Marx’s backing for their view that the way to deal with crises is to raise wages further. They are quite wrong. Of course Marx favoured the attitude of workers getting as high wages as they can at any time, but he did not hold that crises could be averted by raising wages. He dealt with the higher wages argument in Capital (Vol II, p. 475) and showed how absurd it is. Depressions end when the capitalists see prospects of profit improving. Putting wages up further would reduce profit margins not increase them.

No Cure for Capitalism

Because Socialists view the thirty-year Labour-Tory experiment with Keynesian fallacies as a complete fiasco for the working class it must not be concluded that we are enamoured with the prospect of returning to capitalism without inflation. With or without inflation capitalism will go on producing unemployment, crises and depressions. With Labour government, or any other government, “managed” or left to market forces, with or without more nationalisation, capitalism has nothing to offer to the working class. The only course for the workers is to replace capitalism with Socialism.

Edgar Hardcastle

George Brown in Cloud Cuckoo Land (1965)

From the May 1965 issue of the Socialist Standard

Mr. George Brown, Minister of Economic Affairs, is convinced that there are such things as “fair" and prices, and has got the employers’ and employees’ organisations to agree to attempt to regulate prices and incomes. He knows “his people” so well to be sure that when the instructions get to the individual worker and capitalist they will make them work.

Briefly, the Prices and Incomes Policy is to regulate the growth of all incomes at the rate of three and a half per cent per year, whilst keeping prices stable. George Brown hopes that public opinion will influence capitalists to keep prices down when they could put them up, and that it will restrain workers’ wage demands.

This policy will fail for exactly the same reason as “free” enterprise regulated by the price system. Brown seems to forget that capitalism is a competitive class society and that the economic forces acting upon capitalists and workers are stronger than all the moral suasions and judgements. In fact already there are many claims by sections of the working class aiming to get on to a “platform of equality” with other workers, e.g. doctors, teachers, farmers, before the growth rate commences. Further, there are many workers, some recognised by George Brown as being lowly paid, who will have to press for increases considerably greater than three and a half per cent.

The big laugh is that if by some fluke George Brown were to succeed and peg wage growth rates at three and a half per cent, we may all be like Alice—running faster and faster to stay in the same place. There is not much point in having three and a half per cent increase in wages if you have to pay three and a half per cent more for the things that you require to get the health and strength to increase your productivity by at least three and a half per cent.

But then who are we to laugh at George? We can’t solve his problem either. In fact, within capitalism the problem is not soluble. If we widen our terms of reference however, the whole aspect takes a rosy, instead of blue, hue. The world has enough resources to satisfy the needs of man—we have the population capable of exploiting those resources, of producing the goods where man needs them—only capitalism, with its production for profit, stands in the way.

Rachman, Bloom, Ferranti are a natural part of capitalism. George Brown cannot change a society in which the hall mark, and professed route to efficiency, is competition, into one wherein co-operation prevails, without changing the economic basis of society; and we can rest assured that he cannot do that.

Ken Knight

John Prescott: a Labour man through and through (2025)

John Prescott in 1966.

From the January 2025 issue of the Socialist Standard

Many of the obituarists of the late Lord Prescott quoted him as saying that despite all his achievements, he’d be known for that one punch on a protestor on the campaign trail in Rhyl. The more serious obituaries covered his career as a politician, achieving the high office of Deputy Prime Minister, and alluding to the Jaguars and the affair. Tony Blair himself came out and was full of praise for Prescott, and acknowledged how much his premiership needed its deputy. Corbynites remembered the time he defended their man on Question Time. Above all, though, his Lordship was a man of the Labour Party through and through, and it is worth going back behind the Punch and Judy of high office to the thing that first brought him to prominence: the 1966 seamen’s strike.

The seamen’s strike

Prescott was one of the co-authors of a pamphlet Not Wanted on Voyage: The Seaman’s Reply published by the National Union of Seamen, Hull Dispute Committee, in June 1966. It was written because ‘owing to the biased nature of the Pearson Inquiry Report recently published it is vitally necessary that a counter-balance is put out to put the seamen’s fight into perspective’. They alleged that ‘so biased is the Pearson Report against the seamen’s case that one cannot but feel that it was simply set up to capture public opinion, including trade union and Labour Party opinion – which so far has supported the seamen – and marshal it against us’.

Much of the pamphlet deals with the minutiae of overtime and pay rates, but the core claim for the seamen was for a 40-hour week at £14. As the historian EP Thompson described the strike: ‘The British seamen, after decades of near company unionism had accomplished that most difficult of industrial actions (in an industry whose members may at any point be scattered across the seven seas), a national strike with high morale and solidarity’ (Writings by Candelight, p. 53). The Wilson government infamously alleged that the strike was prompted by Communist Party agitators, claiming ‘The moderate members of the seamen’s executive were terrorized by a small professional group of Communists or near Communists.’ As Thompson notes, there were no Communists on the seamen’s executive.

The authors alleged ‘Our case has not been treated on its merits. Social justice has been overridden by political expediency.’ They claimed that ‘the Government’s obsession with the incomes policy has been evident throughout the strike. We had to be beaten, because our claim was a “breach in the dyke of the incomes policy”’. Hence, although the powers were never used, the Wilson government declared a state of emergency over the strike. ‘There is a wealth of evidence we could produce to show that behind the Government, in its resistance to our just demands, stand the International Banks, the financial powers that really direct the Government’s anti-wage policy.’

Prescott and his co-author went into detail as to how the make-up of the Pearson Commission indicated that the fix was on, in particular, how the appointment of Joe O’Hagan (General Secretary of the furnace maker’s union) to the commission was intended to neutralise any opposition in the TUC, as he held the chair of the General Purposes committee. This is indicative of their approach of looking at the personnel involved in the structures of power. They went into great detail over the personal connexions between shipping owners and the press barons.

They noted of the shipping industry:

‘In the past, British shipping contributed on a major scale to the earning of foreign exchange, but in this field too, its recent record is one of consistent decline. Between 1952 and 1962 shipping’s contribution to Britain’s earnings abroad fell by over £111 million, or by an average of 3½% per year.’

Likewise: ‘Most of our major competitors developed the bulk container transport method during the 1950’s, whilst our shipowners […] did nothing’. This, they alleged, was down to the ‘shipowners’ incompetence’. Their complaint, essentially, was that the wrong people were in charge.

‘This backward, selfish group of owners, through their spokesman, arrogantly claim (ignoring the whole miserable record we have described) that “the national interest” so often thrown at the seamen by Press, TV and Government, IS THE SAME THING AS THE SHIP OWNERS’ INTERESTS’ [emphasis in original].

They urged the nationalisation of the industry but clearly envisaged that as being a mere change in the personnel at the top, and still cast the question of how shipping serves ‘the national interest’ in a world of competing states.

Poacher turns gamekeeper

Prescott and his co-author also alluded to Labour’s previous record, stating:

‘The goodwill of the bankers, the ill-will of the working class. How familiar a story that is of Labour Governments, when we cast our minds back to Ramsay MacDonald and the 1929-31 government.’

Nowadays, we could add a few more Labour governments to that list.

Prescott had first stood for Parliament the same year as the strike. In 1970 he got elected MP for Hull East. By the 1990s, he was the shadow transport spokesman, extolling ‘public private partnerships’ as an alternative to nationalisation and a way of getting the industry to serve the national interest. He would later be part of the Blair government that institutionalised PFI as the default way of funding government projects.

By 2002 he was standing in the House of Commons, updating MPs on the situation with regard to the firefighters’ strike:

‘This Government cannot be asked to find additional money outside the agreed Government spending limits. To do so would risk fundamental and lasting damage to the economy. An inflationary pay rise for the firefighters would lead to inflationary pay rises elsewhere in the public sector, and that in turn would lead to job losses, inflation and mortgage rises.’ (tinyurl.com/PrescottHOC20022226)

He affirmed that ‘The Bain review has proposed a way forward. That is the basis for discussion.’ He clearly learned the lessons of the Wilson government. ‘The goodwill of the bankers. The ill-will of the workers’. An epitaph for Prescott and the Labour Party.

Pik Smeet

So They Say: Imaginary Differences (1976)

The So They Say Column from the June 1976 issue of the Socialist Standard

Imaginary Differences

Cartoons have been appearing in the press suggesting that the policies of the Conservative Party have become a mystery—that they offer no alternative to the Labour Party. In an attempt to dispel this view, cartoon characters in the shape of Conservative MPs and their attendants have been hurriedly pounding tables proclaiming that there is a clear distinction between “Conservative philosophy with Socialist [Labour Party] dogma” (letter to the Daily Telegraph, 12th May 1976).

What the Conservatives had to do was point out to the country that the Labour Party was under the control of the left wing and the Michael Foots of the world and then point out that the Tories were a party who took a different view and line for the future.

Daily Telegraph, 28th April 76

If that was not a tall enough order to begin with, the Labour Party is not making things any easier for them. Maurice MacMillan (Conservative MP), attempting to “make clear our own constructive alternatives”, pointed to the basic problem as he saw it:

Conservatives must be bold enough to say that businesses and investors must be given a real incentive by allowing them additional profits from their investments.

Times, 10th May 76

While MacMillan and his fellow drones have been plucking up their courage to say such a thing, they appear to have missed Callaghan who found his nerve some days earlier:

The first thing to concentrate on is to ensure that there is sufficient incentive to provide a proper level of investment in these firms so that productive jobs can be created. That is what I would like to focus on. But I don’t believe you can force a large private sector to invest. You can lead a horse to water, but you can’t make it drink, and you have to apply the incentives necessary which compel it to drink.

Guardian, 5th May 76

Conservative philosophy or Labour Party dogma— after the froth, they bow to the profit motive.

An Acceptable Face

We have heard of the blind leading the blind. Now we have William Whitelaw, deputy leader of the Conservative Party, lecturing his cohorts on public relations. At a meeting held in a pub on 27th April he informed members of the Reform Group that at the next election Conservatives would “break from the party political tradition of making manifesto promises.” Other things were to change too—“we have to be scrupulously honest.” Good grief! What are they going to put in it? Whitelaw had an answer for that as well; they would announce “decreased public spending.” But before his audience could choke on their beer and sandwiches, he quickly pointed out that appearances could be deceptive: The Tories must not

turn into a hard-faced party. We must not be seen as the party looking all the time on the money side and not being interested in the various social problems that are certain to come up, and certain to be increased as our country is short of money. We must act with an economic head but also be seen to have a heart at the same time.

Daily Telegraph, 28th April 76

There goes the “scrupulously honest” facade. If this body politic of fair face, economic head, bulging pockets and kindly heart requires soft brain-matter, Whitelaw will no doubt become a donor.

You'll Never Walk Alone

It was hard to imagine that the announcements had not been made to the accompaniment of tambourines, the Joystrings and the Hallelujah Chorus: “We’re next for the economic miracle, says Healey” read the headline in the Daily Telegraph of 11th May.

Providing we can make this incomes policy stick to the end of the next wage round, I believe we have got the inflation problem under control. Now we must concentrate on the problem of unemployment. We want to get back to full employment within three years from now.

But "full employment” has become a loosely interpreted phrase, and before the “believers” acclaim the “miracle worker” too hastily, we draw attention to the specific statements made by Healey in the previous week.

The best we can hope for is to reduce unemployment to 3 per cent. or about 700,000 in 1979 . . . The TUC have expressed the hope that unemployment can be reduced to 600,000 in 1978. But I have already explained to them that this is too ambitious.

Guardian, 5th May 76

So the “miracle” becomes a mirage, and not a particularly distinguished one at that. The working class can take cold comfort from what Healey described as:

The tributes [which] are pouring in to the patriotism, the far-sightedness, common sense and maturity of our trade union movement as the full magnitude of this achievement sinks in.

The “achievement” of course, being the incomes policy agreement, not the aforementioned “miracle" which is only “hoped for.” Surely the TUC, who could by no stretch of the imagination be described either as far-sighted, or of mature judgement, must have noted the incongruity when Healey gushed forth:

Even the central bankers of the United States and Germany have added their tribute to the British trade union movement in the last few days — and believe me that is something.

Praise indeed, when the capitalists give tribute to the workers. Such praise is normally reserved for those occasions when members of the working class are encouraged to kill and maim one another on the battlefields.

What a Lovely Miracle

The chancellor expanded elsewhere on what he described as “the full magnitude of this achievement” —there were to be many sides to the miracle. Not only would there be the (hoped-for) 700,000 unemployed, but “The deal guaranteed that from August, wage rises in Britain would be the lowest in the world.” But how low an increase does he mean? Again we find some rather loose interpretation. An increase can usually be taken to mean an addition, but not apparently to Healey:

In fact wages will be coming down while our competitors will be going up . . . That is the best possible news for exports and employment.

Times, 11th May 76

In the light of the foregoing, and as the Chancellor is calling for “an 8.5 per cent annual increase in manufacturing output” and claims that “If we could get as much output out of our existing equipment as most of our competitors, we could increase our national income even without new investment by anything up to 50 per cent”, members of the working class would do well to consider their rôle in the “miracle.” It will be what it has always been—that of the wealth-producing class which owns nothing but the chance to work (literally) for the benefit of the owners. When workers see this division, they will have recognized exactly those whom the Labour Party represents.

Buy Me and Stop One

The ruthless examination of all aspects of social requirement from the point of view Can money be made from meeting such requirements? is one of the hallmarks of capitalist society. Marx put the view that when Socialism is established man will look back on his previous forms of society, including present-day society, and will describe them as pre-historic. We take a clipping from the London Evening Standard of 13th May which serves to underline the extent of our “civilisation.”

A price war is raging among private abortion clinics, it was claimed today. Mrs. Helene Grahame, of the Pregnancy Advisory Service, a London based charity, said the days of the get-rich quick abortionist look to be fading fast . . . Advertised prices of £50 and £60 are now quite common, against £70 to £80 a year or so ago . . . Clinics are advertising much more widely and extravagantly, and a free pregnancy-testing is being used as a come-on. All the indications are that they arc getting pretty desperate for patients — which is why they are getting into this kind of price war.

The Daily Express of 14th May reported the phenomenon in an even more matter-of-fact manner. The first line of their piece told us: “Women can now shop around for an abortion at the right price.” Hats off to capitalism: If the thing runs true to form we can next expect the equivalent of supermarkets giving special offers and Green Shield stamps.

Alan D'Arcy

News in Review: Keeping cool in the space age (1966)

The News in Review column from the March 1966 issue of the Socialist Standard

Keeping cool in the space age

The fabulous achievement of Luna 9 was bound to cause a lot of excitement. But when everyone about you is losing their heads it is, as we know, a sound idea to keep calm.

What does a long, cool look at space flight reveal?

In the first place, it speaks volumes that with a mass of unsolved problems like hunger, crime, bad housing and war plaguing us on earth, capitalism spends such enormous efforts on investigating other worlds.

This is not an objection to space flights on moral grounds; there is no logical reason to expect capitalism suddenly to start putting human welfare before its own interests.

Space investigation is given a high priority by the world’s two great powers and it is not difficult to see why this is so.

Both the United States and the Soviet Union make no secret of the fact that their space programmes are an essential part of their military effort, yielding valuable information on guiding systems and aiming techniques for long range missiles.

Already the information is being used for military purposes; both powers have observation vehicles in orbit above us and the Americans have actually publicised their plans for a military space laboratory to be sent up in the near future.

But even if we make the effort to ignore this consideration and assume that the exploration of space is purely a matter of scientific investigation, there is still the question of what the world working class can hope to gain from it all.

Have the conditions of any worker, anywhere, improved—indeed, can they hope to improve—as a result of the space flights, the probes into the moon, the dare-devil acts of space walking and the rest? The answer is clearly no.

Who, then, stands to gain? Even at the present, new industries have arisen as a result of space flights, and established ones have done their best to get in on it. (The Daily Express, whose equipment helped to receive the moon pictures from Luna 9 made some quick advertisements out of it)

Presumably, other new industries will rise in the future, employing and. exploiting their workers in their efforts to make profit from the romantic business of space travel.

Eager investors will want to get in on this. Perhaps there will be a Unit Trust which deals in space shares.

In short, all capitalism’s normal standards of commerce and profitability will be applied to the Space Age. The knowledge which the flights yield will be used, as all such knowledge has been in the past, for the benefit of the ruling class —to improve the returns on their capital, to protect their interests, to establish them in new markets.

Perhaps, in the end, to help them blast their rivals out of the field—or the sky or whatever.

Man’s probing into space is only the latest of his victories over his environment, and the same lesson applies to it as to the others. Capitalism is the cause of the problems of modern society and until it is ended man’s achievements— his skill, his knowledge, his courage- will be misused and perverted.

Rail strike and the incomes policy

It would be difficult to say whether the last minute calling off of the rail strike was more of a relief to the Government or to the National Union of Railwaymen.

From the word go, the threatened strike was given a dramatic build-up; expressions like ’’last ditch” and ’’breaking point” cannot have been given so thorough an airing in the press for a long time.

The railwaymen were assailed from all sides. Even papers like The Guardian and the Daily Mirror, which in the past have been sympathetic to them, were urging the strikers to have what they called common-sense.

It was, apparently, a time fraught with danger for us all. If the railwaymen got their way the Government’s Prices and Incomes Policy would collapse and ruin, which anyway has never stopped hanging over us, would descend.

But it was no secret that the Incomes Policy was already a flop. Sooner or later then the Government had either to abandon it openly or provoke a head-on clash with a big union.

The NUR was predictably resentful at being awarded the part of keystone in George Brown’s policy, although they really had little to complain about, they, after all, support the Labour Government and they also support its Incomes Policy.

The trouble was the usual one, of getting a union which accepts wage restraint in principle to apply it to its own members in practice. The NUR was all for the Incomes Policy, but did not want to be the one to start it.

Indeed, who is going to volunteer for this role? Who will choose to ignore the effects of rising prices, who will forego a chance to improve their conditions, who can escape the class struggle?

So far, the answer is—nobody. The railwaymen are only the latest in a long queue of those who have campaigned for higher wages since the Labour Government came to power. Some have got it without resorting to anything as vulgar as a strike threat; the judges, high rank Civil Servants and members of the Armed Forces have all been given more than the Incomes Policy allowed them.

And, of course, there was the case of the Members of Parliament and the Ministers who, being in the happy situation of being able to give themselves a rise, agreed soon after Mr. Wilson took over that they should all have one.

Yet Ministers and M.P.s are the very people who are urging the rest of us to hold back on our claims. It is by no means unreasonable to expect that, if the Incomes Policy had to be started somewhere, it should have been in the House of Commons.

But the Members, when they were deciding that they should have a rise, used exactly the same sort of arguments as any trade union. They said they were overworked, that they could not make ends meet, that the House was not attracting the best sort of Member because they could get better money outside.

So the Incomes Policy, at least on the surface, is saved and staggers on to fight another day. Mr. Wilson has once more stood, like a knight in shining armour, between us and disaster—and once more has gained a lot of political advantages out of it, especially over George Brown, who was shown up publicly as unable to pull off something which Wilson could do.

Mr. Wilson has scored another palpable hit. But there is no denying the class struggle of capitalism. There will be other battles, and other strikes, and more undercover deals to settle them.

All right for some

It was most inconsiderate of the North Vietnamese Government; they might have guessed the effect it would have. True, they did their best to rectify the matter but in future they really must be more careful.

It happened on the 8th February last and it was started by a statement from the North Vietnamese Consulate in Delhi that President Ho Chi Minh had asked India's help in putting out peace feelers over Vietnam.

The Consulate quickly pointed out that the same request had been sent, presumably as a matter of routine, to several other governments, most of whom had dismissed it as the customary meaningless public relations stuff.

But before anyone had realised this a minor wave of panic hit Wall Street, where some investors were appalled by the prospect that peace would actually break out in Vietnam.

What would happen in such a situation to all that money invested in the aerospace and defence industries? When a war is hot and the killing fast, the sun shines on these investments. But the terrible prospect of peace brings dark and heavy clouds.

Thus it was that when some idiot in Delhi got the wrong end of the stick, and when the information was passed on, Wall Street's war stocks took a tumble. It took the later explanation from the North Vietnamese to put the matter right

Then Wall Street recovered. All the war investors there, who stay so courageously out of the firing line, made good their losses and that little corner of capitalism went merrily on. Of course in Vietnam the killing and the suffering continued, but what was that against the averting of a crisis on Wall Street?

This is all reminiscent of the 1951 slump in business in the United States and England, which was caused by the cancellation of government contracts no longer needed after the end of the Korean War.

It goes to show that not only does capitalism cause modern war but it also makes a business out of it—a business with its salesmen, its stocks and shares and its investors.

And let us not forget that the man who does well out of war investments, the man who gets a nice profit from putting his money in bombs and bullets, in fear and destruction, is that thing so beloved of capitalism — a Successful, Patriotic Business Man.

Mr Heath makes a discovery

Mr. Edward Heath, who fought his way up from the world-famous slums of Broadstairs through Oxford University to become (he hopes) the next Prime Minister of Great Britain, has recently made a staggering discovery.

Of course, since he became Tory leader Mr. Heath's publicity boys have been making sure that we discovered one or two things about him.

He's a bachelor. Lives in a flat in Albany, which is not one of those places you get into because you have enough points in the council housing list.

He plays the piano. And the organ. And he likes to conduct choirs dressed up (Mr. Heath, not the choir) in a big yellow sweater.

All of this should prove to us that Mr. Heath is a Man Of The People. And in case there are any doubters on this score, the leader himself has recently been probing around the People; that is how he made his staggering discovery.

There are far too many under privileged people in Britain. (Mr. Heath’s words, not ours—he said them at Birmingham last month.) Not only that; a fearless searcher after Truth like Ted Heath has more to reveal. There are also, he said, places which are “. . . breeding grounds of exceptional misery, poverty and crime; bad housing, oversized classes and rootlessness."

Now none of Mr. Heath’s public relations boys has ever issued a hand-out telling us that he suffers from a bad memory. But he seems to have forgotten that it was only two short years ago that he was an important member of a Conservative Government which was asking us to put them back into power because under them we “never had it so good."

And if Mr. Heath has forgotten this, what hope is there that he will remember the promises he is making now, to “. . . put an end to poverty and hardship in this country once and for all . . ."? Or that especially moving bit about old age pensioners “. . . a bit of extra tea to entertain a friend . . .”?

Perhaps the safest thing to assume is that the Tories do not expect this sort of drivel to be taken seriously; perhaps they think that in this time of pre-election fever anything goes. (A couple of days after his Birmingham speech, Mr. Heath was challenging the Government to let the electorate decide . . which party most has the welfare of the needy at heart”)

But if the Conservatives do mean it to be taken seriously—and if that is how the electorate take it — then there is clearly no bottom to the depths of political cynicism, and a depressingly dense stratum of working class gullibility to be penetrated.

The Freeze and After (1972)

From the December 1972 issue of the Socialist Standard

One of the myths of our age is that wages are sometimes restricted and sometimes not. Wages are always restricted; it is only the method that changes. Unless wage rates are kept down to levels which leave a margin of profit for the employer he intensifies the search for ways to reduce his total wages bill by getting more output from each worker; failing which he stops production and stands workers off.

The government always plays a part in this. It stands behind the employers, backing them up to deal with strikes and other manifestations of working-class discontent. But the government’s role is not always in the same form. It sometimes includes direct intervention through the imposition of controls on wages and prices. Generally this is when conditions favour the workers in pressing for wage increases. This happened in two world wars when unemployment had practically disappeared. By contrast, nobody talked about a prices and incomes policy between the wars when there were two million unemployed, markets were failing and bankruptcies soaring, prices were tumbling and workers were completely unable to prevent wages falling with them.

Promises, Promises

Since 1945 there have been half a dozen attempts by Labour and Tory governments to impose controls, starting with the “Wage Restraint” of the Attlee Labour Government imposed in September 1948. They have been variously named but all conform to the same general pattern. They were all excused as emergency measures called for by unforeseen circumstances, they were all claimed to be needed to prevent prices from rising and British exports being priced out of world markets with consequent increase of unemployment, and all were in contradiction with the election programmes of the Labour and Tory parties. Mr. Wilson rightly chided Heath with having abandoned his election pledges but seems to have forgotten that the freeze imposed by his own government in July 1966 came only four months after the Labour Party election programme had said “our purpose is not to dictate prices, wages and salaries”.

None of the post-war “freezes” completely prevented some increases of wages and prices. Nearly all were followed by a bigger rate of increase, with wages rising slightly more than prices. From the employers’ point of view the most successful freeze was the first, the Labour Government wage restraint from September 1948 to October 1950 which kept wage increases appreciably below the rise of the cost of living. As a method of preventing prices from rising the freezes, individually and collectively, have been a complete failure, for the rate of price increase in 1971 was higher than at any time since 1945.

Trying to Manage

In 1944 the Tory, Liberal and Labour parties all committed themselves to a three-point policy of stable prices, full employment and steady growth of production. Critics of government policy have often pointed out that at no time has a Labour or Tory government succeeded in getting all three together; it remained for Heath in 1972 to fall down on all three at the same time — a million unemployed, fast-rising prices and near-stagnant production.

The imposition of the present freeze was surrounded with loud recriminations between Heath and Wilson, all of it signifying nothing because this one does not differ from past Labour Government freezes except in minor details and reflects the same erroneous theories which are shared by the Labour and trade-union leaders with most of the Tory leaders. (The Times cynically commented that “it is their business to criticize each other”.) The Labour Party motion of dissent in the House of Commons on November 8 did not condemn capitalism and offer an alternative, but blamed the highest unemployment since the ‘thirties and a massive increase in the cost of living on “mismanagement of the economy” by the Tory government. The chairman of the Parliamentary Labour Party, Mr. Douglas Houghton MP, who in 1967 was boasting of the success of the Wilson government in making “modern capitalism work”, attacked the Tories this time not on the ground that they are running capitalism but on the ground that they are not “managing” it properly: they have, he said, “left capitalism unbridled”.

Guess the Answer

The completely erroneous theories held by the political and trade-union leaders since the three-party declaration in 1944 are that capitalism can be managed in a way to secure permanent full employment, with a more or less stable price level. On full employment, the TUC in 1970 declared:

“Maintenance of full employment is chiefly the responsibility of the government. All political parties, the Confederation of British Industry and the TUC accept that this should be the case. There is agreement that the necessary techniques are available to sustain full employment . . . “ (TUC pamphlet, Automation and Technical Change)

On stable prices, Mr. Wilson in 1957 wrote:

“Ever since the Coalition Government’s White Paper all major parties have been committed on Keynesian lines to using the Budget as a means of avoiding undue inflation or deflation.” (Labour Party pamphlet, Remedies for Inflation)

At the beginning none of them said anything about wage and price freezes, but already in 1957 Mr. Wilson was saying that: “For a Labour government no less than for the Conservatives, success or failure in the battle against inflation would depend on its ability to secure an understanding with the unions which would make wage restraint possible”. For the unions it was either you agree “voluntarily” to restraint or you have it imposed.

Act of Iniquity

Much of the conflict between the Labour Party and the unions on the one side and the Heath government on the other about the failure of the consultations which preceded the present freeze concerned the question of the Industrial Relations Act. The Labour-trade union side argued that if the Government would suspend the Act it would make agreement easier.

It is to the point here to recall the case made against the Act in 1970 by Vic Feather, General Secretary of the TUC. It was not that the Act would depress wages but that it would encourage competitive wage claims between workers and push wages up too much. “This Bill would create a wage drift of a kind the country could not afford, either now or at any time in the future.” (Report of a trade union conference, Sunday Times, 13 December 1970).

What has happened is that the policy held by all of them has proved quite fallacious and they do not know what to do next. What the TUC described as “the necessary techniques … to sustain full employment” meant in practice “pumping more money into the economy”, which they imagined would lead to expanded production and full employment but which is a sure specific for putting up prices. As the Chancellor of the Exchequer, Mr. Barber, has complained, he wants to pump more money in the belief that production will then expand but at the same time wants to “curb the money supply” to stop prices going up.

Marx was right. Capitalism goes through its phases of expansion with low unemployment on one hand, depression with heavier unemployment on the other, in spite of government financial and budgetary policies. The only remedy is to replace capitalism with Socialism.

Dreadful Prospect

In the meantime, fearful of the explosion that could occur if inflation is carried on extremes, the view has been gathering support among economists and business men that the government should stop inflation whatever the consequences. The Tory politicians on the other hand recoil from this because one consequence could be that they lose the next election. So they put their trust in the hope that British capitalism now, after several false starts, is on the way to recovery from the depression.

They have another fear. There is one Tory politician who never accepted the Keynesian nonsense and who wants to go back to the old-style policy of letting capitalism take its course, with the unions “free” to make which wage claims they choose and businesses “free” to go bankrupt if they can’t survive. Some commentators have begun to speculate on the possibility that if Heath’s hopes of industrial recovery are not speedily fulfilled, Enoch Powell will get the leadership of the Tory Party.

Edgar Hardcastle

After the Election (1964)

From the November 1964 issue of the Socialist Standard

A favourite story of the First World War concerns two high born young officers in the thick of a desperate battle. All around them the shells scream and roar, the soldiers claw their way through the lethal mud. One of the officers turns to the other: "I say, Fanshawe, won't you be awfully glad when this horrid war is over and we can get back to some proper soldiering?"

Now that the election battle has subsided, now that the politicians's roars have been stilled, now that the smokescreens of promises have cleared, a certain fact can be discerned. All the while, capitalism has been waiting for the nonsense to stop. Now it can get back to some proper soldiering.

What does that mean? Even while the battle was raging, calm voices could be heard indicating that capitalism would be largely unaffected by the result. Here, for example, is the City Editor of the Evening Standard, writing on September 24th about the similarities of both Labour and Conservative policy on the capital gains tax:

It now seems certain that a new Capital gains tax will be introduced next year—whoever wins the Election. . . .

The Stock Exchange, the Institute of Directors, and the top brass of the Labour Party have all said that they want changes. . . . 

From what 1 hear . . . a re-elected Tory Government would tackle the subject pretty soon.

Other voices could also be heard, some of them not so calm. Mr. Khrushchev forgot that elections are times when everybody should be studying how good capitalist society is for us, and announced that Russia had a "monstrous new terrible weapon” which could destroy humanity. Of course, the Russian Ex Premier said afterwards that he had not meant that, that he had never said it and even if he had he had been misreported. Everyone had misunderstood him. Russia has only a "terrible weapon”—non nuclear.

The shock waves from this announcement duly arrived at Washington, where the military have for some time been worried about the offensive potential of bomb carrying space-satellites. President Johnson felt it part of his duty as President—and perhaps part of his election campaign—to claim that the United States has new defensive installations, in place, operational and on the alert, which could destroy hostile satellites. These installations—if they exist—are there because the other side has developed the means of penetrating the old defences. Presumably, the latest defence installations will cause the other side to work out new, more penetrative, more powerful weapons. This is a two-way process—the Americans are also working on missiles to get through the latest Russian defences. This all goes under the name of the policy of the deterrent and it is supposed to make us happy and secure.

It is reasonable to suppose that the up-bidding by Johnson and Khrushchev in the game of international nuclear poker did not influence many voters in the British election. How many voters were appalled at the fact that capitalist society spends so much of its time and talents on trying to blow itself up? How many asked themselves why the richest nations in the world are so anxious to have the world’s most fearsome weapons?

The answer to that question is easy enough to come by. Consider this example, so normal to capitalism that it passed almost unnoticed.

Not very long ago, nobody bothered very much about the North Sea. You could sail across it, fly over it, you could fish in it. And then a funny thing happened. The Dutch discovered a rich field of natural gas, which is now thought to be the second largest of its kind in the world, and capable of supplying Europe's needs for many years. It did not take a lot of elaborate detective work to connect this discovery with the small British oilfields in the Midlands and to surmise' that oil and gas bearing rocks might stretch right under the North Sea.

Then everyone became interested in ending the arrangement which allowed the North Sea to be a free area. Ah international conference parcelled out the seabed between the interested powers. By this solemnly legal method the British government stoic 100,000 square miles of seabed and they shared this out, in the shape of licences to drill for oil and gas, to firms like Shell, Esso, British Petroleum and the Gas Council. All the capitalist parties were agreed that this was a fit and proper way of settling the affair:

Mr. Erroll said the Bill under which the licences were issued had been thoroughly discussed in the House of Commons this year and nobody had suggested matters should be handled differently. (The Guardian, 18/9/64.)

It is obvious that there will be some changes, now, in the North Sea. A rich supply of oil or gas, or both, will be especially interesting to British industry, which at present is so precariously dependent upon oil from abroad. But there could be other effects, equally interesting. The British interest in the oilfields of the Middle East has been responsible for many clashes of arms there. The Suez invasion, the refusal to get out of Cyprus, were only two recent examples of this. In the same way, the French hung on in Algeria, and prolonged the bloodshed there, because of the discovery of oil and gas in the Sahara.

It is obvious that British capitalism would be equally determined to protect its investments in the North Sea. At the moment the area is all allocated. But what if some other capitalist group, which was not in on the original carve-up, decides that it also needs to get hold of some of the North Sea resources?

This is not a fanciful question. At the end of the last century the expanding capitalism of Germany was faced with a similar situation. They had arrived too late to get their share of the colonial and commercial loot from the ruthless scramble of a little earlier. They tried to catch up by diplomatic and trading bargains. They tried threats and military adventures. But the end was inevitable and we saw what it was in 1914 and 1939.

If the same sort of dispute arises over the North Sea, the capitalist powers will probably try to bargain it out of existence. They may even succeed, for a time. But in the end, if the conferences fail, the good old final solution of a head on, armed clash will follow. No holds will be barred and the side with the biggest bangers will win.

And that, to return to our original point, is why the Russian ruling class have their monstrous weapons, why the Americans have theirs and why both sides—indeed all sides—are in the arms race. Capitalism is a world divided by conflicting economic interests, which are asserted by the armed forces of the rival nations. These forces must always be ready, must always have the most up-to-date weapons—even if this means that they have the means of destroying the human race.

This is all quite normal to capitalism. It goes on during elections, and when the dust of battle has cleared it is still there. Proper soldiering, in fact.

On the home front it is the same story. Both Labour and Conservative parties were clear that a major preoccupation of the next government would be their “incomes policy"—more accurately known as their method of controlling wages. "Labour," said The Guardian, "would demand from the unions cooperation in an incomes policy.” The Tory manifesto put it: "an effective and fair incomes policy is crucial to the achievement of sustained growth without inflation."

What this means is that the struggle between the employers and the workers, over wages and working conditions, will continue. The working class will continue to depend upon their wages for their life. They will continue trying to improve those wages and conditions and the government will continue trying to hold the improvements in some sort of check.

The working class freely voted for capitalism in the election and in doing that they freely voted for the system which compels them to struggle and which so often reduces any temporary advantage they may gain.

These sombre facts do not prevent the politicians promising that some day, in some mysterious way, things are going to get better. The politicians’ airy promise is an established part of proper soldiering. Some have been foolish enough to have passed into political history, to stand as monumental warnings against verbal extravagance. (One old time Labour minister was so famous for the generosity of his promises that be was called “the greatest blatherer alive.”)

Consider these two statements:

. . . the long, dark night is over and . . . a better day is dawning for Great Britain and the world. The wonderful recovery of trade and finance in the last seven years is the most marvellous miracle in the history of the world.

And the other:

It is a time for action, for decision, for exciting changes It is a time for opportunity, opportunity for all our people, all our children, to break through man-made barriers of privilege and snobbery, and be free to give their talents and energies in service to their country.

The authors of those two statements were Phillip Snowden, in 1926, and Harold Wilson in 1964 (neither of whom were ever called "the greatest blatherer alive"). There is no reason to reveal who said which, because both statements are equally meaningless. The point is that the blathering of capitalism is an enduring as the system itself.

Proper soldiering. Massively destructive machines, the deadly rivalry between opposing capitalist blocs, poverty and strife, all covered by an enormous blanket of politicians’ nonsense. The working class may vote for all of this, although they are the people who suffer most acutely under it. But a few of us will have no part of the soldiering. We have our eyes and thoughts on the better world and you will not find us on parade in the morning.

Ivan.

So They Say: Nearest and Dearest (1973)

The So They Say Column from the October 1973 issue of the Socialist Standard

Nearest and Dearest

The case last month in which an Englishman married a Malawi-born woman to prevent her deportation, the couple intending to divorce immediately, was treated by the press as unique. It is not. Five years ago the celebrated small-ads pages of International Times were regularly carrying advertisements from seekers and offerers of nationality-by-marriage. They are currently to be found in the Personal column of Private Eye:

Englishman (26) offers citizenship by marriage. Best offer.

Englishman offers British citizenship £800.

Englishman offers British citizenship. Best offer over £1,000.

Socialist Standard readers are invited to think of a new answer to the question: Would you let your daughter marry a black man? As Byron wrote, “ready money is Aladdin's lamp”. In its light can be seen the fatuousness of legal marriage vows as well as the stupidity of national boundaries and immigration laws.

Growing Stunts Your Growth

The classic definition of inflation is “too much money chasing too few goods”. The aim of western governments wrestling with it has been to try to hold back wages and prices on one hand, and promote productive growth on the other. More goods, less currency: it seems logical. “Growth” is not only the answer to the inflation problem, but the source of the ecological one. With growth, pollution comes; without it, we are in the economic mire.

That is what they say, at any rate. But a report from Japan (Guardian, 1st September) turns the economic picture another way up. There, to try to stop inflation the Cabinet has framed measures “aimed at moderating the growth rate of Japan’s economy”. The programme has familiar features like cuts in bank lending, hire-purchase restrictions, etc., but goes on to a series of limitations on development. They include the postponement of public works and the reduction of outlays on new plant and equipment in the motor industry. The Ministry of International Trade and Industry will also

ask six industries to reduce capital spending plans in fiscal 1973 by 102 billion yen, centring on long-lead-time projects. These include the steel, petrochemical, electronic and electrical machinery, aluminium smelting and rolling, electric power and retail sectors.

Pay Attention, There !

In fact, capitalists in Japan, like their counterparts everywhere else, recognize that they must follow not the theories of government but the market. On 10th September the “City Comment” columnist of the Guardian asked an industrialist if his company was affected “by the thought that the Government was committed to the expansion of the economy and running immense economic and social risks apparently on industry’s behalf”.

The blunt answer was no. The company was paying no attention whatsoever to Mr. Heath’s obstinate growth policy in forming its new investment plans. It was working on the assumption that by 1975 demand for its products would be slowing down markedly, for other industries the deceleration would come earlier. As for Mr. Heath’s expansionist propaganda, it was dismissed as ‘politicians’ talk’, for public consumption.

Making A Crow Grow

One company whose “profit growth record” has been checked is Acrow Engineering group. Due to the losses of a newly-acquired subsidiary, Steel Group of Sunderland, Acrow's pre-tax profits for 1972-73 rose by only 3 per cent., from £2,617,000 to £2,697,000, instead of the 10-13 per cent, shown in the last five years. According to the annual report (1st September) the difficulties at Sunderland are now being resolved; and “the original Acrow companies had performed well”.

“Performed” is an appropriate word. Students approaching an Acrow works in south-east England for vacation work this summer were offered employment as labourers for 20p. an hour. A 44-hour week in factory conditions at that rate brings a wage of £8.80p. before deductions. Perhaps it is a scheme for teaching economics students the meaning of “surplus-value”, first hand.

Rising Tally

Another interesting report is that of the Provident Clothing company. Its profits have been rising for some time, and in the six months to 30th June this year they jumped 35 per cent. Provident Clothing’s figures have to be given in an unusual way. The leap in the current year is from £71.2 millions to £127.6 millions in amounts due from customers and from £12.5 millions to £25.6 millions in deferred revenue.

Financial-page comment has put this surge down to “buoyant consumer sales”. However, Provident is the best-known name in the check and voucher business — hence the statement of incomes “due” and “deferred”: like the weekly payments for clothes and household goods. Nothing “buoyant” about that. Provident Clothing prospers through poverty and working people trying to make ends meet. No doubt employees of Acrow Enginering are among its regular customers.

Liberal Sentiments

The recent Liberal Party gains have produced euphoric visions of capitalism humanized by Liberals’ “concern for the individual”. It is more to the point to know what economic policy the Liberal Party would try if in power. On 11th September it published a document which proposes “a prices and incomes policy enforced by fiscal penalties”.

The penalties envisaged are for exceeding laid-down rates of increase in prices and wages. For companies they would be additions to Corporation Tax; for workers, surcharges on graduated National Insurance contributions. John Pardoe, MP, defending this policy in a letter to the Guardian, called it “foolproof” and asserted:

It needs no policemen and no prisons, and it removes the Government from day to day interference in wage and price settlements.

Oh, marvellous: away with all this cumbersome machinery, and let us return to straightforward pay cuts.

It would be interesting to learn how the obviously large addition to Inland Revenue work is to be accomplished. Tax officials have complained continually of understaffing and overwork. Is the solution to raise wages to recruit more clerks, and then cut the wages to defeat inflation ?

A Freudian Misprint

“No doubt it is possible for a well led, well educated, well housed individual ... to come to the conclusions reached by your correspondent.” (Letter from a clergyman to The Guardian, 7th September; our emphasis. If he did not mean it, he should have.)

Robert Barltrop