The Passing Show: South African Realities (1960)

The Passing Show Column from the July 1960 issue of the Socialist Standard

South African Realities

Anyone who doubts the validity of the Socialist interpretation of events in South Africa — that what we are seeing is the emergence of a new capitalist class, together with the corresponding proletariat, in a country still ruled by the landowners — would do well to look at The Times Supplement on South Africa, which appeared on May 31st. Valuable figurcs are given to back up the verdict that “during the 50 years of the Union, South Africa has developed from a pastoral country into a modern industrial state,” and that the last two decades have witnessed “unprecedented industrial growth.” Steel production, for example, has increased a hundredfold in twenty-five years. The total gross value of the output of South Africa's manufacturing industries has gone up from £40 million in 1915-16 to £1,424 million in 1955-56, thirty-five times as much. Even allowing for inflation, there is still obviously a gigantic increase here.

As the Supplement puts it, “it has become clear that new policies and fundamental changes in attitude are necessary if rapid industrial growth is to be continued into the next half century.” This means, of course, that the policies of the capitalists will have to replace the policies of the landowners. The justification for this is to be found in that favourite phrase of the capitalists, “economic realities.” The Supplement says:

At this time political issues completely overshadow economics in any assessment of the future—the key question being whether government policies will be in harmony with economic realities (industry’s complete reliance on a stable, settled, urban non-white labour force) or whether there will be further attempts to impose on industry racial policies that will increasingly undermine productivity and progress. . . . It has now become quite clear to industrialists that South Africa can realize its great potential and its ambitions to become the “workshop of Africa” only if a contented and stable labour force is built up and if existing barriers to productivity are removed. . . . Industry itself is now beginning to recognize what this means in terms of housing, social welfare and minimum wages, and the need to encourage the emergence of a property-owning African middle class with a stake in maintaining social stability.

It would be hard to improve on these quotations as a statement of the aims and ambitions of the South African capitalist class at the present time. The capitalists now dominate the South African economy: how long will it be before they dominate South Africa politically?—especially since capitalism dominates all the other “civilized” countries of the world. Well, they themselves are optimistic. As the Supplement sums up: “South African industrialists are confident that economic realities will prevail and that a new and constructive approach to the problems of growth in a multi-racial society will emerge.”

Race Hate

The fascist British Union Movement has been distinguishing itself again, this time when some of its members followed an American Negro comedian along the street, shouting abuse at him from a loudspeaker van. There have been some indignant comments on the incident from those who consider themselves left-wingers. No doubt these protests are sincere, but they are illogical. For the capitalist system breeds race hatred. Only in the last twenty years we have seen the ruling classes of various countries, whenever it was in their own interests, whipping up hatred of the Jews, the Germans, the British, the Russians, the Americans, and many more. From time to time every capitalist country goes to war, and needs the working class to kill and be killed in defence of its masters’ profits. The official propagation of race hatred is one of the means inevitably used to lash the workers into the necessary frame of mind. So that people who oppose racialism and at the same time support capitalism (private or state) are merely defeating their own ends.

In the meantime Mosley’s fascists demonstrate the gentlemanly standards of the “white civilisation” they claim to be defending, by hurling insults at a foreign visitor in the open street.

Mutual Help Society

From The Times (9-6-60):

The Institute of Directors have accepted an invitation from the State Scientific and Technical Committee of the U.S.S.R. to send a goodwill and fact-finding mission to Russia to study problems of Soviet industrial management.

Sir Richard Powell, Director-General of the Institute of Directors, said that the mission is “an attempt to get an overall picture of top Russian management policy in industry and commerce. . . . It should prove a unique opportunity for high ranking British businessmen to see their Russian counterparts at work.” 

Without question the ruling class of Russia and the ruling class of Britain could help each other a great deal by showing each other how they run their respective businesses, and keep their respective working classes in order. Although capitalism in Britain is still largely private, while in Russia it is state-run, nevertheless the two economic systems are the same in every important respect. The “high-ranking British business men” and their “Russian counterparts” will have a great deal in common. We look forward to the day when the British and Russian working classes will co-operate in the establishment of Socialism, just as today our masters collaborate for the better running of capitalism.

Alwyn Edgar

'Bosses’ pay increased by 45 percent last year . . .' (2011)

From the June 2011 issue of the Socialist Standard

 In response to TUC calls to ‘pay your workers more’, the annual Institute of Directors meeting retorted that ‘the world is full of dreamers’ and instead bewailed the profligate spending habits of the average worker: “We’re all told you must go on holiday all the time and do all these other things ... There’s more to be gained from teaching employees how to manage their money more effectively than giving them more money to mismanage” (‘Bosses’ pay increased by 45 percent last year, but the Institute of directors won’t give you a rise’, Observer, 15 May).

The Passing Show: Time and Money (1958)

The Passing Show Column from the December 1958 issue of the Socialist Standard

Time and Money

Capitalism comes to different countries in different forms. The more recently a country has become Capitalist, the more efficient—from the point of view of the Capitalists—its system is likely to be: for it can draw on the experience of the rest of the Capitalist world.

Capitalism’s first need is for plenty of workers. One of the most important steps in any Capitalist revolution is to drive many of the peasants into the towns, where they can form the new urban proletariat. If this is done too quickly, agricultural production will suffer; if too slowly, industrial production will be held up. Again, even in peace time each Capitalist state must maintain a standing army, to preserve internal "order” and to deter and to threaten other states. If this army is too small, other countries are not sufficiently impressed; if it is too big, it means that some men are kept in idleness when they could be working in factories or on farms for the profit of the Capitalists.

As the Capitalists see it, one drawback of their system is that these categories—town-worker, farm-worker, soldier—are too rigid. It takes prolonged economic discomfort before a town-worker will become a farm-worker, or vice versa; if only because it usually means a man and his family leaving the area they know and moving away to another district altogether. And when in war-time the army has to be rapidly expanded, it takes time and money to set up the large organisations necessary to conscript' and train workers as soldiers.


Latest Model—Convertible

But China, which has been setting up its state Capitalist system only in the last ten years has been able to draw on the experience of British, American and Russian Capitalism, and has apparently been able to avoid some of the shortcomings of earlier Capitalist systems—shortcomings, that is, in the estimation of the ruling class. For example, over-rigid classification seems to have been avoided. According to press reports (e.g. The Observer, 9th November, 1958), the unit in the new Chinese Capitalism is not the factory or the farm, but the commune, the average size of which is “about 8.000 households”. The great advantage of these, to Mao Tse-Tung and his fellow-rulers, is that the Chinese worker is not allowed to settle down as one thing or the other; instead, he is organised in a thousands-strong labour corps, and then he and the rest are used as “workers peasants or soldiers, according to actual needs.” If this scheme succeeds it will make the American and Russian boss green with envy.

The Chinese have gone further. Communal mess halls are set up to feed the workers, and kindergartens to take care of their children: and thus the women of the commune too are “set free”—to join the labour corps. Shantung Province chums that it has "liberated six million women for productive work.” The commune owns all the land, the peasants having been compelled to hand over their individual plots to it. It runs agriculture within its boundaries on the lines of a great state farm. It also runs schools and broadcasting stations, collects the taxes—and organises the militia. But it does even more. In the last year or two thousands upon thousands of small factories have been set up throughout China: these, too, are run by the commune. It is "industrialisation without towns.” By these means the Chinese ruling class hopes to avoid the waste of the years of starving out the peasants, and the diversion of resources to build great new towns, which slowed up the British and the Russian Capitalist revolutions. The commune has replaced the town or the factory as the unit of industry, the village or the farm as the unit of agriculture, and the regiment as the unit of the reserve army. If everything which is reported is true, China’s system may turn out to be the most profitable Capitalist system we have yet seen.


Back to the alphabet

But why is this system mistaken for Socialism or Communism? Both those who support China's rulers—the Communist Party—and the majority of those who oppose them, call China a “Communist” country. The Observer article mentioned above had a sub-title "A New Communism.” This is to get the very ABC of economics wrong. A more efficient form of Capitalism does not become Communism. All the well-known features urban (and rural) proletariat, owning neither the tools they work with nor the things they produce; a money-system of exchange, which is pointless except to deprive the workers of the full value of their produce; and a resulting surplus value, which goes to support the ruling class, for whose benefit the whole system is run.


Heredity

Another book has been published recently about the Churchills, from the Duke of Marlborough and his forebears down to Sir Winston. The idea behind it is a common one: that social characteristics, such as the quality of “leadership,” are passed down from parents to their offspring. No one doubts that physical characteristics. such as the colour of eyes and hair, are passed on to children in all animals, including human beings. But that social characteristics can be passed on seems a lot more doubtful, to say the least of it. In any case, full investigations are seldom made. To trace Sir Winston Churchill’s descent from the Duke of Marlborough, and to conclude that Sir Winston inherited some of the qualities of the Duke, is often done. But Sir Winston is in the eighth generation from the Duke, which means that he had two hundred and fifty-six ancestors in the Duke's generation, all of whom, according to this theory, presumably contributed as much to Sir Winston's character as the Duke of Marlborough did. And of these two hundred and fifty-six, sixteen were full-blooded Iroquois Indians. (Sir Winston Churchill’s mother had one Iroquois great grandparent). So if we accept the theory, whatever Sir Winston got from the Duke of Marlborough, he must have got sixteen times as much from the Iroquois. But whoever wrote a book about that?

The velvet glove

As a postscript to the events at Famagusta last October (when four lives were lost and two hundred and fifty people were injured in the British “search for suspects” after a woman was found murdered) a remark of Brigadier Terence Clarke, Tory M.P. for Portsmouth West, is not without interest. The Brigadier says (Reynolds News, 9th November, 1958): “We’ve had too much of the velvet glove : what we want is a bit of the mailed fist”

If four deaths and 250 injuries appear to the Brigadier to be too much like the “velvet glove,” one wonders what scale of casualties among the civilian population would be produced by his “mailed fist”

Laugh of the year

Sir Anthony Eden is reported to be among the possible candidates for the Nobel Peace Prize for 1958 (Sunday Express, 9th November, 1958). This Peace Prize award is always ridiculous; how can it be anything else, when it is inevitably presented to someone who supports the present system of society, which leads to wars as surely as old bread goes mouldy? But the consideration of this man, whose last service to peace was to commit aggression against Egypt on the grounds that Israel had already attacked her, makes the whole thing even more of a farce.

Scandal

Those who live on the exploitation of the workers have of late years become much more coy. Once no gentleman would admit to an occupation; now the wealthy often conceal their idleness by becoming directors of companies. Nevertheless, members of the upper class themselves sometimes let slip in unguarded moments just how much work is attached to being a director.

One such admission was recorded on October 12th in the Sunday Express, which in its hot pursuit of scandal often allows the rest of us illuminating insights into the lives of the rich. Some time ago a “Kentish squire” disappeared from his home, at the same time as a riding mistress nearby disappeared from hers. The Sunday Express had to give its readers a long report on the matter, with all the details, of course: no doubt in fulfilment of the high moral duty of the newspapers to the public, about which they so often tell us. But what concerns us is the fact that the squire was a director of an estate company. If the holding of a directorship fools the world at large, it doesn’t seem to have fooled his wife. Her husband, she said, “ hasn’t worked for twenty years."

We all have our worries

On the topic of directors, an interesting little booklet has appeared recently. It is entitled “Health Problems of Directors,’’ and it is published by the Institute of Directors. Among the dangers and causes of ill-health that these gallant men have to contend with are mentioned: (1) Eating too much; (2) Drinking too much; (3) The blows to. a director’s self-esteem which come from being theoretically in charge of a concern about which his subordinates know a lot more than he does. The man at the factory bench or clerking in the office seldom realises the risks run by his boss. The Institute of Directors, of course, might lengthen its list. For any new edition of this stimulating little work may we mention these further hazards of a director’s life: (1) Falling off his horse when playing polo; (2) Barking his shin when his chauffeur is helping him from his Bentley; (3) Spraining his wrist while tucking into the turtle soup at official banquets.

Alwyn Edgar

Everyman a Capitalist (1959)

Editorial from the June 1959 issue of the Socialist Standard

Classifying objects by their essential similarities and differences is a necessary step to thought and action.. Every trade unionist does this when he organises with others who live by receiving wages, against employers who live on profits. The Socialist does it when he differentiates the system of society known as Capitalism from a basically different system of society he calls Socialism.

But the words that enable us to think clearly can also be used to cause confusion by linking up unlike objects which happen to have unessential similarities. Outside of politics the absurdity of this is easily recognised. Nobody thinks himself justified in describing an ice-cream as a small iceberg, a stickleback in a mill pond as a small whale, or a pigmy as a tiny giant. But in politics this kind of thing is going on all the time and most people do not readily see that it is fallacious.

We are led to consider this by the current campaign of the Tory and Labour parties “to make everyone a Capitalist."

A Board instead of a Boss 

Not that the two are agreed on how they propose to do this. The Labour Party came to it through a series of debasements of the ideas some of its founders had half a century ago. Appalled by the spectacle of arrogant wealth and abject poverty existing side by side, they thought that if the government appropriated the land, factories, railways, etc., we could have a nation of people all employed by the State and living in comfort and on a more or less equal standard of living. Apart from that drastic act they proposed that the other features of life in Britain would go on as before: buying and selling, importing and exporting, holding colonies, taxation, saving and spending, etc. They soon decided on grounds of practical politics that confiscation was impossible, but they continued for a long time to proclaim their intention of nationalising the land and the major industries. Six years of Nationalisation by the post-war Labour Government practically killed it. The voters clearly did not much like what they saw. It was all very well a dozen years ago to tell unions and railwaymen that they, along with the rest of the workers, had joined the Capitalists by becoming, through the government, the owners of the mines and railways, but talk of this kind would get a cool reception today from the miners and railwaymen who are being sacked because of redundancy. They do not feel that they are any better placed than the redundant cotton workers; being sacked by a Board instead of by a boss is no less painful.

So the old sweeping Nationalisation is off, and when the Tories accused the Labour Party of intending to nationalise 600 big firms, instead of saying “Yes, of course,” as they would have done in their early days, Mr. Morgan Phillips, Secretary of the Party, issued an angry denial. “We do not intend—and we have never stated in any official document—that it was our intention to nationalise the large firms.” (Daily Herald, April 30th, 1959.)

The new Labour Party plan is for the government to buy shares in large companies and in general not to take them over.

The Labour Party still maintains that it is Socialism they aim at. They called the original scheme Socialism, and they call the new scheme Socialism. They were wrong then and wrong now. Government control or ownership of whole industries or of shares in companies is Capitalism not Socialism. The Observer, (May 3rd, 1959) is quite right when it says of the Tory plan and the Labour plan: “What is significant is that both parties nowadays rely equally on the process of Capitalist growth.”

All to be Capitalists!

The Tory plan, sponsored by a Conservative Party Committee in a booklet “Everyman a Capitalist," is similar in that it proposes the buying of company ordinary shares, but it differs in that the shares are to be bought by individual workers. They will, however, not buy them direct but through investment trusts, which will buy shares in a number of companies and then sell industrial investment certificates to individuals.

The ideas behind both plans are much the same. They are put in the form that it is a good thing to have more people “owning a stake in industry,” and that these new small owners will share in the growth of capital and profits of the companies.

There are several things wrong with the reasoning. Ten years of low unemployment on the one hand and rising prices and profits on the other, have not altered the fact that depression with its heavy unemployment and falling profits and bankruptcies are just as “normal” to Capitalism as are its booms. Workers who buy shares expecting only rises may find themselves owning depressed or worthless shares. It is always the big speculators, “the men in the know,” who have the best chance of selling in time. 

Secondly, the relatively small sums owned by individual workers do not cease to be only trifling amounts in comparison with the wealth of the Capitalist class by being put into company shares instead of being deposited in a Savings Bank. Even if the prices of shares and profits of companies went on rising the relative position would be the same, because the wealth of the rich would be growing at the same time. All the changes of the past 50 years have not altered the basic relationship that about a tenth of the population own about nine-tenths of the accumulated wealth.

Small Millionaires

Thirdly, and more important still, the relationship between the Capitalist, who lives by the wealth produced for him by the working class, and the working class who produce that wealth, but receive only a part of it in the form of wages, is not altered at all. The worker who has a few hundred pounds saved does not cease to be dependent on wages because he receives interest or dividend of a few shillings a week from his investment. And, to come back to where we started, the possession of a few hundred pounds does not change a worker into a Capitalist. A Capitalist is a man whose wealth is large enough to enable him to live on the “property income” he receives from it, an income derived from the exploitation of the working class. The worker with £300 is no more a "small Capitalist ” than he is a "small millionaire."

Why are the Tories fostering this idea? Clearly it is with the purpose, not of making us all into Capitalists— which is as impossible as having a social system in which all the population, including the slaves, are slave-owners —but with the intention of deceiving the workers into believing that they have an interest in preserving Capitalism.

The Institute of Directors have issued a booklet called "Mind Your Own Business" warning companies against the dangers of Nationalisation. It is a very good description of what workers ought to be doing, provided that they recognise that their employers’ business belongs to them, not to the workers they employ, and that the two schemes, Tory and Labour, for promoting what a city editor calls "popular Capitalism” (Manchester Guardian, 4th May. 1959) are both of them useless and dangerous to the working class.

Tough at the Top (1959)

From the December 1959 issue of the Socialist Standard

Accounts appeared in the press recently of a report published by the Institute of Directors summarising the results of a questionnaire that had been circulated at random among some of its members, 5,000 out of a total of 32,000. Replies were received from 61 per cent. of these.

The investigation, carried out by the Institute’s Medical Research Unit, is part of a long term programme to “define occupational hazards,” and to give a picture of a top executive’s daily existence. More than two-thirds of those questioned stated that they arrive at work by 9.30 a.m., travelling in cars—self-driven except for 6 per cent. Another one-fifth travel by public transport. More than half work late hours and at home, and some work on Saturdays.

Three-quarters stated that their holidays last year were not more than three weeks. Less than 10 per cent. work less than a full day and 90 per cent. spend three-quarters of their time in executive work outside the Board Room.

In their replies 64 per cent. of the directors attributed their success to experience alone. Only 14 per cent. had a University degree. And although more than 60 per cent. of directors may attend a “Business Lunch" once or twice a week, a third lunch at work in staff canteens and dining rooms.

In reporting the above, the Daily Telegraph (27.10.59) had this comment:—

  The average Company Director’s job may have certain compensations, but it is far from enviable from the point of view of long hours and punishing effort . . . Life is indeed tough at the top.

The firms employing these directors, according to the report, are not extremely large undertakings judged by present day standards. 50 per cent. have a capital issue of less than £10,000 and only one-fifth have more than £1 million employed capital. These figures would eliminate most of the large combines and state-controlled industries.

Most of these directors who have a “tough time” are with firms who have to face keen competition in the business world and to quote the article “their position is far from enviable"—as it is for the majority who have to work for their living.

The Director-General of the Institute, Sir Richard Powell, is reported as saying that: —

  To pin down the occupational hazards of executive life it was necessary to know how a man spent his day both at home and at work. The answers, and we have only quoted those of most general interest, will provide our medical director, Dr. H. Beric Wright, with a basis for further research, the aim of which is to keep the director fit and on top of his job.

Well! Well! Keep fit! Most of us lower down the wages scale are below par; and millions of working hours are lost through sickness and injury. Now we see it extends to those “at the top.” In this rat race of an existence the highest possible efficiency must be maintained. Although they have a higher standard of living than most, how many would be secure if their job folded up? We have an idea they would be annoyed if told that their interests are identical with the interests of the rest of the working class.

When we read of those “at the top” we might ask “the top of what?” They may be at the top in the way of remuneration for looking after the interests of their employers, as are Service Chiefs, Cabinet Ministers and others, but those really “at the top” are those who own sufficient wealth to enable them to live without having to sell themselves to an employer. This is the dividing line by which one can judge to which class one belongs; Socialists say that all people who have to sell their energies to an employer are members of the working class.

Picture the “City Gent” complete with bowler hat, rolled umbrella and Daily Telegraph, after fighting his way into the “sardine tin” of a railway carriage, managing to get the above-mentioned article within reading distance. Perhaps he will feel better when he is convinced that those at the top (which he hopes to reach) have a tough time of it.

There is no mention of the real “top” —no mention of private planes, seagoing yachts, palatial residences, and all that money can buy. That “top” is above the clouds. Don’t trouble to look.

Claudio.

Cooking the Books: Capitalist Ideals (2006)

The Cooking the Books column from the June 2006 issue of the Socialist Standard

"The unacceptable face of capitalism" has become a standard term for excusing some excess of capitalist enterprise as if capitalism could ever have an acceptable face. At the annual jamboree of the Institute of Directors at the end of April, Todd Stitzer, chief executive of the Cadbury Schweppes group, whined that "business bashing has become everyone's favourite sport".

"He said recent scandals and disasters, from 'Enron to Arthur Andersen to Exxon Valdez and Bhopal', were not typical. 'These episodes did expose the unacceptable face of capitalism . . . But the business world is not populated by malignant people determined to harm others and exploit the world for base profit'" (Daily Telegraph, 27 April).

He was also reported as saying that businesses had to try to convince the public that companies were "capitalists with ideals" (London Times, 27 April).

Of course Stitzer and other heads of capitalist corporations are not (or at least the vast majority of them aren't) "malignant people determined to harm others and exploit the world" but it remains true that their "ideal" is, and has to be, maximizing profits, base or otherwise.

The personal views and motivations of business leaders are not relevant to the way the capitalist system works. Business leaders are cogs in the economic mechanism of the accumulation of capital out of profits derived from the surplus value produced by the class of wage and salary workers. They have to pursue a policy of maximising profits, even if this might "harm others and exploit the world", as this is what has to be done for their particular company - in fact, for any company - to stay in the competitive struggle for profits. If they didn't do it, somebody else would be found who would.

It is true that some of them seem to have completely internalised putting the making of profits before everything else and delight in applying this ruthlessly, and that this has earned business its deserved reputation for having an interest only in the bottom line. Others, such as Stitzer, may have some qualms about what they are doing, but do it all the same.

Then there was the case of the Norfolk and Norwich Hospital Trust which was tricked by a consortium which had contracted to build a new hospital for them. The "re-financing" deal was exposed by the House of Commons Public Accounts Committee, whose (Tory) chairman, Edward Leigh, called it . . . "the unacceptable face of capitalism".

What happened was that, after the hospital had been built, the consortium Octagon was able to obtain better financial conditions for the money it had borrowed to build the hospital. An extra £116 million was raised which, according to the (Tory) MP for Norwich South, Richard Bacon, was used "not to build more wards or a new cardiac unit. The sole purpose of this extra borrowing was to speed up the rate of return to investors" (London Times, 3 May).

Octagon had done nothing illegal. They had merely used their financial expertise to get a favourable deal for their shareholders at the expense of a hospital trust inexperienced in such matters. It happens all the time. In fact, such wheeling and dealing is virtually all that goes on in the City of London where not an ounce of wealth is created, but where financial capitalists try to trick each other - and any inexperienced suckers they come across - out of what has been produced by the working class.