Letter: Full employment, slumps and other questions (1964)

Letter to the Editors from the October 1964 issue of the Socialist Standard

Full employment, slumps and other questions

Dear Sir.

An article published in the Socialist Standard in January of this year posed a question with its title, namely "Are you better off?" Unfortunately, however, the article does not provide any definite conclusion.

The article does however concede that the average increase of the purchasing power of take-home pay is probably about 10 per cent.

"In the meantime, owing to more than proportionate increases of pay deductions from pay (national insurance and income tax), the average increase of the purchasing power of take-home pay is not the 18 per cent of the two indexes would show (wage rate index and retail price index) but something less, probably about 10 per cent Socialist Standard, page 9, January 1964.”

It might also be pointed out that.the present alleged standard of affluence that many of the working class are at present living at is dependent on their wives going to work in order to augment the family budget. But, notwithstanding, this and other factors such as the tremendous growth in hire purchase commitments, it is difficult to deny that the worker of today is better off if fully employed, as the vast majority are at present, than his counterpart was when unemployed in large numbers before the Second World War, particularly in the slump of 1929. In case it should be asked why one should compare the lot of a fully employed worker to that of an unemployed one in the pre-war period the answer is that millions were unemployed then, and relatively few are unemployed now. The article in question gave four columns of figures, one of which gave the number of unemployed of 1938 when it stood at 1,927,000. The column next to this gives unemployment as a percentage of 1938. this year being taken as 100 per cent. If these figures are accurate, then we may conclude that unemployment has not reached 50 per cent of this level since 1938.

On this aspect of the problem the article in your journal is significantly silent. In fact I think it would be true to say that the Socialist Standard has failed to account for this continuing full employment since the end of the war and does not even find the subject worthy of discussion in its columns.

May 1 therefore ask the following questions?

(a) Why in your opinion has the slump which you maintain is an essential feature of capitalism failed to appear in England?

(b) Why has there been no slump of the magnitude of 1929 since the war.

(c) Are the present conditions of full employment, increasing the membership of your organisation and the sales of the Socialist Standard.

(d) Do you think the orthodox economists using ideas of the late Maynard Keynes have found a way of preventing widespread and profound slumps of the pre 1938 variety and if not how do you account for this rather prolonged period of full employment?

I am, yours etc.

T. Lawlor

Reply:

Our correspondent comments on the fact that, compared with pre-war years, the position of the workers has been affected by the decline of unemployment and the increased number of married women who go out to work, as well as by the rise of average wages in relation to prices. This was referred to in the article, where it was pointed out that total wages are about five times what they were in 1938, “mainly because of the decline of unemployment and the fact that far more married women are now out at work".

Whether this last factor can be regarded simply as a gain is another matter. In the nineteenth century the need of married women to work was commonly regarded as a disadvantage by those who studied its consequences.

If however it is a fact that most workers now are rather better off than before the war, this kind of development is not a new thing. Frederick Engels noted in 1885 that since 1844, when he wrote his The Condition of the Working Class in England, the factory workers had become “undoubtedly better off”, and the condition of engineers, carpenters, joiners and bricklayers, organised in the trade unions, “had remarkably improved". (See Preface to 1892 Edition).

In the same Preface and in the 1886 Preface to Capital Engels then went on to state a position which events proved to be wrong. He had concluded, because of the length and severity of the depression, that British Capitalism would never resume its expansion and that “either the country must go to pieces or capitalist production must ”. He thought unemployment was bound to increase year by year and that shortly, “ the unemployed . . . will take their fate into their own hands ”,

Profiting by Engels' mistakes the SPGB reached the conclusion (one indeed that Marx and Engels had themselves seen) that the achievement of Socialism calls for understanding on the part of the workers and cannot be the outcome of discontent and despair without understanding.

Our correspondent accepts rather too easily the claim that there has been “continuing full employment since the end of the war". In the column of figures to which he refers in the January Socialist Standard it is shown that since the war unemployment has ranged from 302,000 in January 1956 to 861,000 in January 1963. This latter figure may not be high by pre-war standards but it certainly cannot be described as “full employment”. Allowance ought also to be made for the fact that unemployment will have been increased in the nineteen thirties by the big flow of migration into this country. In post-war years up to about 1960 the net flow was outwards.

Against that background we can answer the specific questions.

(a) For this question it is necessary to take care about the use of words. If by “slump” our correspondent means only a “heavy slump” like that of the thirties, the answer is that such heavy slumps are not an essential feature following each capitalist crisis.

What we had as an essential feature o! capitalism is, to quote the words used by Marx in Capital, Volume I, Chapter XV, Section 8: —

The life of modern industry becomes a series of periods of moderate activity, prosperity, overproduction, crisis and stagnation.

The crises, that is the sharp interruptions of booms, have continued to happen in the post-war years. For example, the index of production in January 1963 was down to 108, after having reached 120 in January 1961. If in post-war years, the ensuing “stagnations" have not been heavy and prolonged this is in line with the experience of crises in the nineteenth century. Most of these crises were not followed by heavy prolonged slumps. The outstanding big ones were in the eighteen forties, the eighteen eighties (the one that threw Engels off-balance) and the nineteen thirties, and in between there were depressions that were not heavy or prolonged.

(b) Among the reasons why heavy depression existed in the nineteen thirties and not in post-war years in this country (experience of some other countries has been markedly different) is the absence of a very important factor which existed then. This is the pre-war feature of crisis-dislocation superimposed on the long-term decline of some very big industries, agriculture, coal and cotton without the counter effect of strongly expanding new industries. In post-war years, along with a much larger Civil Service, large armed forces and armaments industry, there has been expansion of building (helped by war-time destruction and stoppage of building), man-made fibres, electricity and electrical engineering, motor car and aircraft manufacture, television, chemicals and oil, electronics and nuclear power.

(c) If this question means has low unemployment since the end of the war been accompanied by a continuous increase of membership, etc., the answer is no; but we would not expect increase of membership to be determined by low unemployment any more than the heavy unemployment of the thirties had that effect. Other factors also come into it.

(d) This question relates to the supposed ability of governments to prevent widespread and profound slumps by means of the techniques associated with the late Lord Keynes. It will put the matter into perspective to point out that also before 1935 (the year Keyne's major work appeared) there were, between the heavy slump, long periods without heavy slumps.

If it is claimed that Keynesian techniques give Governments effective control over capitalism why did unemployment rise to 861,000 in 1963? As all governments have at their disposal these same techniques, and numerous economists who approve of them, why have many countries had heavy unemployment for prolonged periods since the war. among them U.S.A.. Canada. Germany, Italy, Belgium and Denmark? In Italy unemployment ranged between 1½ and 2 million for 10 years after the war. During this year unemployment has been at the 6 per cent level in Canada and U.S.A.

How have the techniques supposed to have worked? The Keynesians claim that the Government can, when it likes, stimulate capital investment and consumption and at other times damp down over-expansion. When the present motor car boom slackens off as it certainly will, what can the government do, if the world market for cars is temporality saturated, except wait for demand to recover? Theoretically the government could have prevented the industry from expanding so rapidly—and left the market to be filled with the cars of other producers—but the car manufacturers, the trade unions and the Tory and Opposition M.P.'s would all have protested.

Now that the Southern Rhodesian tobacco industry has been hit by falling prices following a bumper crop, how can Keynes help them? The producers are in fact turning to another and older technique, that of restricting production.

Of course it long ago ceased to he true that Keynesian doctrines were held only by the unorthodox minority. They had become the orthodoxy of large numbers of economists and members of governments. Now fashion is changing again and Keynes comes under increasing criticism. It would seem that his theories have not proved, even to his admirers, to be the panacea they were claimed to be.

Editorial Committee.

Editorial: Are We Progressing? (1933)

Editorial from the October 1933 issue of the Socialist Standard

Hopes and Fears for Socialism

The man who says that he has no use for theory is wrong—and dangerous. Yet the Socialist is always coming up against people who justify their lack of concern about Socialist theory by some such jibe at all theory. In the matter of politics, as in the care of the human body, the man who believes that he acts on no theory at all, but on “common-sense,” is, in fact, only acting on the theories which happen to be most widely accepted at the moment. In the field of politics this is almost tantamount to saying that such a man is bound to be wrong, for are not the existing widely-accepted theories the ones which have been applied without success as a cure for the existing evils?

There are sound theories, that is theories which are in accord with the existing facts and which, if applied, will produce the result intended; and there are unsound theories. The man who “does not believe in theory” is blindly accepting the unsound theories propagated by those who do not understand the economic and political situation and by those who have an interest in maintaining it as it is, evils included. The two theories found most frequently among those who will not listen to the Socialist case are not confined to any one political party, but are common among Liberals and Tories, Labourites and Communists. The first is the theory that conscious organised action to achieve Socialism is not necessary because, in spite of appearances, “things are getting constantly better and better.” The second is the theory that conscious organised action need not be taken because everything will go on getting worse and worse until there is a really terrifying crash “which will simply force people to do something.”

Superficially both theories appear to be plausible enough: fundamentally both are hopelessly wrong. They are dangerous to those who hold them and a serious obstacle standing in the way of the Socialist movement.

The first theory appears to be true because at any given moment there always does seem to be a great deal of activity directed towards making things better. Just at present we are being promised better trade and less unemployment, the abolition of slums, a better organised milk supply, better transport, shorter hours, electricity in our homes—and, of course, higher wages. The snag in it is twofold, firstly it is so far all talk, and the resulting performance—when it comes—will produce quite a small mouse compared with the mountain of promises, and, secondly, that by the time this mouse has been brought forth, capitalism, the source of our present troubles, will have given birth to a large number of other terrifying evils. If you doubt this look back over the past hundred years of “solutions” of the housing problem, the poverty problem, the unemployment problem, the hours problem and the wages problem. They are always being solved. “Solutions” are the permanent stock-in-trade of the capitalist politicians. If you feel disposed to give a chance to some young political group which roundly denounces the old gangs for their failure, remember that the old gangs all began as young fire-eaters; and observe that the planks in the programmes of the new gangsters, are only the same old worm-eaten rubbish with a new coat of paint.

The other theory, the theory of “crash,” looks plausible because periodically unintelligent discontent does burst forth in the shape of violence and destruction.

Yet both theories are unsound. Neither the gradual accumulation of social reforms, nor the periodical outburst of violence solves the problem which faces us. To see that this is so it is only necessary to glance over the events of the past 30 years. In spite of wars and upheavals, Labour Governments and dictatorships, capitalism persists without any essential change for better or for worse. It makes a little adjustment here and another there, it replaces one set of rulers by another set, it calls things by different names, but the same essential capitalism is here with us yet.

Thirty years ago dawn was announced in the Welsh hills by David Lloyd George. Poverty was to be abolished from this land of plenty. Health insurance—9d. for 4d.—was to guard us against the hardships of illness. Labour exchanges would find work for the unemployed. The land tax would undermine the power of the privileged class. If there were anything in the theory that progress only needs a “good leader,” here was the man. Energetic, clear-headed, bold and able to understand working-class problems. What happened ? Nothing very much. The hopes of the workers and the fears of the rich were alike confounded.

Then came the crash, the war. Now—so we were told—the workers would be driven to revolt, and then the new world would be ushered in. The results were otherwise. War-weariness was astutely canalized by this same Lloyd George, with his promises of a ”land fit for heroes to live in,” and his rallying cry to the workers to ”be audacious.” In Great Britain the end of the war saw the workers marching happily behind the man who had betrayed them before.

Then the dawn suddenly shot up in several places all at about the same time. Labour Governments in Australia, so-called Socialist revolutions in Russia, Germany and Austria, followed by a short-lived Bolshevist triumph in Hungary.

What now has happened to those extravagant early hopes? The Socialist Party of Great Britain stood alone in this country when it warned the workers that they were putting their trust in shadows. All those dawns have faded, even if some are not yet everywhere recognised for what they are. The same thing happened with the two Labour Governments in Great Britain, 1924 and 1929- 31.

Then there came hopes and crashes of a different sort, the rise of the Fascists in Italy, followed in 1931 by the National Government in England, and in 1933 by the rise of Hitler in Germany. Part of the working class hailed these events with just the same pathetic fervour as was shown by another part of the working class at the rise of Labour Governments and the rise of the Bolsheviks. So that there was the curious spectacle of one section of the workers looking on MacDonald, Mussolini and Hitler as heroes come to save them, while other workers regarded these men as the embodiments of evil, signifying the collapse of economic life as we have known it, which in fact would mean the collapse of capitalism.

Yet it goes on. Capitalism adjusts itself. Workers go to work under much the same conditions as before. Unemployment, poverty and bad housing continue under dictatorships of the “left” and “right” just as they do under limited monarchies and democratic republics. The means of production and distribution go on being privately owned. Rent, interest and profits, that holy trinity, continue whatever the political form under which capitalism is governed, and whatever political doctrines the ruling clique profess to hold.

Capitalism persists in spite of all the energy and enthusiasm swallowed up in the movements of reform by peaceful penetration and the movements of reform by violence and collapse.

The “inevitability of gradualness” flounders in the same bog as the communist - fascist theory of progress by chaos.

That is the result of following two unsound theories.

Jarrow: the truth that was murdered (1986)

From the October 1986 issue of the Socialist Standard

Jarrow is a trigger word for the British labour movement, detonating emotions, prejudices and false reputations; for half a century it has given nourishment to the misconceptions of Labour politicians. Fifty years ago this month the Jarrow march (it called itself a crusade) set out to bring a petition to parliament from the stricken Tyneside town. It was, to be sure, a moving episode in working class history. now to be celebrated by another march which will climax with the presentation of another petition, worded just as it was in 1936. Most of those taking part will no doubt be sure that they are doing something significant about unemployment and poverty. The crucial question will evade them: why must it happen again, fifty years later?

Labour's propaganda victory of the 1940s was largely based on their asserting that prewar poverty and unemployment was the result of the policies of a heartless Tory government. In support of this, free use was made of photographs of events like the Jarrow march, with nostalgic references to the town's Labour MP, Ellen Wilkinson. In this way the Labour Party succeeded in identifying itself with the march and with the idea that, had they been in power at the time, there would have been no reason for it to happen. In fact the march was not a Labour Party demonstration; it was a protest on behalf of the whole town, the petition was carried jointly by the Conservative and Labour agents and at the time a truce was observed in the local elections. Even more: far from supporting the march the Labour Party and the TUC condemned it. At the Labour conference which took place while the march was on the road the NEC representative made a scathing attack on Ellen Wilkinson. The TUC advised all trades councils to ignore the march. Of course not all of them took this advice but when they did hospitality was often provided to the marchers by the local Conservative Party, or the Territorial Army, or businessmen.

Jarrow's established reputation for militancy comes from its mistaken association with the marches of the National Unemployed Workers' Movement, which happened regularly in the 1930s and which were larger, more demanding and often riotous. Jarrow was anything but riotous; it would be more accurate to describe it as a company town. As it developed during the second half of the 19th century its central industry — in effect its only one — was C. M. Palmer's shipyard, which took advantage of the change from wooden to iron ships to develop a screw-driven collier. Palmer's financial policies have been described, in retrospect, as "exuberant'. which implies that they were recklessly optimistic but at the time they could have had few critics. By 1860 the company was dominant among the iron ship builders of the Tyne. It had grown into a huge, integrated business with its own ironstone mines, its own port, its own coal mines and steel furnaces. Palmer's workforce included a large proportion of highly skilled men such as boilermakers and ship wrights. the kind who are sometimes referred to as an ''aristocracy of labour". Until 1921 Jarrow was, by working class standards, one of the better-off towns, where wages were relatively high. Its people were confident that things would stay that way.

This was reflected in the way Jarrow voted. Until the turn of the century it was a Liberal stronghold. Before 1907 the Unionists would not even contest the seat and one Labour MP grumbled that "There was never a more hopeless constituency for a Labour candidate to attack than Jarrow in the nineties. Sir Charles Mark Palmer, the sitting member, was the most popular man in the north of England". The secretary of the Jarrow march described the place as "more a Tory town than it is a Labour town". After Palmer's death in 1907 the Labour Party won the seat but it then changed between Labour and Liberal until 1929, when a Conservative won there, inflicting on Labour their second worst result in the North-East. When Ellen Wilkinson won the seat in 1935 the Tory vote was as high as 47 per cent. Wilkinson had been a member of the Communist Party, changing to Labour when the Labour Party made it impossible to be a member of both parties. She accumulated the familiar reputation for fearless militancy but — and this again is a familiar story — her career peaked when she became Minister of Education in the 1945 Labour government, which was continually at odds with the Communist Party over its policies both at home and abroad.

In many ways Jarrow represented the economic changes which were forced on British capitalism during the first half of the 20th century. By the 1930s it was accepted by all but the hardest of die-hards that British capitalism had lost for good many of the export markets which it had once dominated and on which so much of its wealth and power rested. As heavy industry and mining, located mainly in the North, went into decline capital was switched to lighter, consumer-orientated industries in the Midlands and South. Jarrow's dependence on Palmer's made it particularly vulnerable in any such movement; the First World War demand for shipping postponed the inevitable but by 1921 the brief post-war boom was at an end and shipbuilding was badly hit. In December that year 36 per cent of the industry's workforce were unemployed, by the following August in Jarrow 43 per cent were out of work. Palmer's were unable to take advantage of the partial recovery which followed and Jarrow might be said to have led the way into the slump of 1929. In July 1932 Palmer 's launched its last ship and in 1933 the yard was closed. By 1934 there were 67.8 per cent of the town's insured workers unemployed, by 1935 it was 72.9 per cent and by 1936 it had reached 80 per cent.

J. B. Priestley, in his English Journey, described Jarrow as he saw it in 1933: "Wherever we went there were men hanging about, not scores of them but hundreds and thousands of them". The town had long suffered a high incidence of tuberculosis — the result of bad housing, malnourishment and topography — in spite of its relative prosperity. In the 1930s the rate of TB rose to double the national average. In 1934, when the infant mortality rate was 47 for each thousand live births in the Home Counties, in Jarrow it was 114. So alarmed was the Board of Education at the malnutrition among Jarrow's schoolchildren that they sent a request to the council to increase free school meals.

Little wonder that Jarrow should feel, in its desperate plight, that an especially harsh discrimination was being applied to it. If, as the title of the famous book has it, it was The Town That Was Murdered who., or what, did the killing? During the recessions of the 1920s and the 1930s some industries attempted to defend themselves by forming cartels with the object of restricting (they called it "co-ordinating" or "rationalising") production and marketing, in the hope that this would enable part of the industry to survive in profitability. Much the same thing happens now in. for example, the oil industry. The steel industry organised the British Iron and Steel Federation, which set itself to oppose any efforts by non-members to open up production. It was opposition from the BISF which caused the abandonment of a plan for an integrated steel plant in Jarrow — the event which sparked off the march.

The shipbuilders' cartel was National Shipbuilders Security Ltd. set up in 1930 with most of the industry and the big banks as shareholders. The NSS was financed through a levy on its members and its object was to buy up shipyards and then "sterilise” them. By 1934, in this way, it had finished off 137 berths, or two-fifths of the British industry. with a production capacity over a million tons. Among them was Palmer s yard at Jarrow, which went into receivership in 1933 and was sold — delivered up to — the NSS in 1934.

With their dreams and their confidence in tatters, it was tempting for desperate, starving workers to think of Jarrow as being murdered. cut off in its prime, by a small group of greedy capitalists supported by a pitiless government. This is a common enough reaction to unemployment; it goes with the theory that capitalism's problems — its disorder, its crises, its inadequacies — are abnormal and could be avoided by running the system differently. Jarrow, it was said, was the victim of a monstrous crime and crime is. or should be. abnormal.

By the standards under which capitalism must operate, what happened to Jarrow was perfectly normal and reasonable. This society does not produce wealth to meet people's needs, or employ them so that they can be healthy and happy. Its wealth is produced for sale on the market, intended to yield a profit to the minority who possess the means of production and distribution, including things like steel works, mines, shipyards and ships. Workers are employed, that is to say their labour power is bought by the capitalists, in order to turn out that wealth. But it is impossible to predict how the market will behave, to control it. to guarantee that it will always absorb what has been produced. That is why every so often there is a "surplus" of some sorts of goods, however much people may need them. When sales are high, in a boom, "exuberant" investment policies are praised as divine wisdom; in a recession they are condemned as blindly irresponsible. So it was with Palmer's; had things turned differently the company would have been a favourite among the economic experts and the apologists for capitalism as a masterpiece of financial and industrial genius.

Jarrow was badly hit in the slumps of the 1920s and 1930s but it was not alone for the entire shipbuilding industry was in decline. In 1920 British yards turned out over 2 million tons but by 1933 this had fallen to 133.000 tons. In 1932 the industry had nearly 60 per cent unemployment; that was the year when, according to the Home Office, two unemployed men committed suicide every day. There was a similar story in towns which had depended on other branches of heavy industry; Dowlais. Brynmawr and Motherwell, for example, all had unemployment at about 75 per cent in 1934.

Some of this must have been in the minds of the Jarrow marchers, as they assembled for their trek to London. This was one of the smaller of the many protest marches of that time — 200 selected men compared to the thousands who would take part in the demonstrations organised by the NUWM. It did not demand better benefits or more humane treatment for the unemployed; its object was to persuade the government to direct investment into the town. The marchers were generally regarded benignly by the police (Special Branch kept close observation on all demonstrations by the unemployed for no matter how desperate working class poverty may be it could be permitted to arouse only the best-mannered of protests), the press and the government — in contrast to the NUWM marches which were battered with relentless sneers and criticism and, by the police, with unprovoked assaults.

As the Jarrow men made their way to London The Times congratulated them on their stoicism and sympathetically reported their blistered feet and their fatigue. They enthusiastically cheered King Edward VIII. who happened to be passing by in The Mall. The Home Office agreed that, as ". . . the marchers show every sign of being orderly, it would be a good way of encouraging them and placating them" to allow them to be entertained in the Houses of Parliament. Taking tea with the MPs was hardly the way to bring down capitalism, or even to change its course. Even more, friendly Members took them on a boat trip down the Thames, which caused them to be absent from the climax of the march — the presentation of their petition. They also missed the government's response, which was bluntly translated for them by a Jarrow councillor: "It means you have drawn a blank". The next day the Jarrow men caught the train back home, to the end "well disciplined . . . conduct was exemplary" in the words of the police report.

Apart from putting the town's name and that of its MP — into the history books and the laying out of one small public park, there was nothing to show for the Jarrow march. Its objectives were restricted and short term but even at that they were beyond its reach. No government can change the nature of capitalism or divert it from its natural course and that was why they had to refuse to do anything to revive industry in Jarrow. They even stopped the marchers' unemployment pay, on the grounds that they were not available for work for the period of the march (there was, of course, no work in Jarrow for them to be available for. but never mind). Capitalism continued on its troubled way; while Jarrow agonised the excessively rich Tory MP Henry Channon set out in his diary some of the difficulties his class were experiencing in early 1937:

[I] had a large dinner party . dinner was magnificent. Lady Granard could hardly walk for jewels.

And later that

I find a new, unexpected joy at the age of nearly forty, in accumulating money and watching it grow.

Those appallingly smug words illuminate the real social and political issue, in the 1930s and now — the class division of society based on the private ownership of the means of life. As Channon wrote, one per cent of the population owned 56 per cent of the wealth in private hands. The situation is very little different today. The social system which exploits and impoverishes the majority, which forced the men of Jarrow to that moving, fruitless crusade, remains in being. Now. after another post-war boom, we are in another recession which again has affected the shipyards of the Tyne. Unemployment in the area is at 25.6 per cent. This is what brings the people of Jarrow to London once more, to set down their protest at the effects of capitalism but giving no thought to abolishing the system. That the famous march must happen again, fifty years on. is no cause for celebration for it demonstrates how futile it was in 1936 — and how futile today.

Ivan

The Socialist Party exposes Mr Chamberlain and his Labour Critics (1938)

Blogger's Note:

 As I just scanned in the October 1938 issue of the Socialist Standard, which covered in some detail Neville Chamberlain and his actions in and around what is now known as the Munich Crisis, I thought I'd take the opportunity to also post on the blog the full text of the 1938 SPGB pamphlet, 'The Socialist Party exposes Mr Chamberlain and his Labour Critics'.

In its long history the SPGB has not made a habit of rushing out special pamphlets dealing with an 'issue of the day' — that is what the Socialist Standard is in place for  — but the Munich Crisis was self-evidently such a burning issue with the threat of possible impending war that the SPGB felt it was necessary to publish a standalone pamphlet which went into greater detail on the matter. It exposed the hard nosed political hypocrisy of Chamberlain's actions and the double-talk of both the Labour Party and the British Communist Party.

Such turbulent times called for special measures, and the SPGB were to publish another 'issue of the day' pamphlet the following year under the title of 'The Socialist and Conscription'. War was for the working class the issue of the day.

The Socialist Party exposes Mr Chamberlain and his Labour Critics (1938)

 

So the crisis is over. Representatives of the four major European Powers sat round the table and concluded arrangements that carve up Czechoslovakia, freeze Russia out of Europe, and, we are fervently assured, lay the basis of “peace in our time”. Lest there should be any doubt about this peaceful future, a great drive to develop armaments is proposed, and plans are being made to ensure that everybody will have a niche in defensive and offensive operations. The temporary popularity of Chamberlain, the general relief at the banishing of immediate war danger, and the united support worked up on behalf of the Czechs, are being utilised to push forward the increased armament campaign.

On September 30th hysterical crowds went wild with joy and hero-worship. War had been averted, and it was believed that Chamberlain was the man who accomplished that deed. His smiling face appeared on placards, in newspapers, and on the moving-picture screen. His wife shared in his fame, and crowds fought to shake her hand. For a while he was the most popular man in England. Yet the strange part of it is that Chamberlain’s fame is based on the circumstance that apparently his plans nearly went entirely wrong; raised the spectre of war, and eventually brought the Munich instead of the Godesberg Agreement. The British Government have been landed in a position in European affairs that was not expected by them. So far Hitler and not Chamberlain has gained most out of the diplomatic manoeuvres of months past.

What were the real facts of the situation? On what does Chamberlain’s claim to fame rest?

The immediate source of Chamberlain’s popularity is not hard to find. For a few days modern war, with its horrors, weighed like a black cloud on the minds of everybody. The subsequent relief on hearing the message of peace released an uncritical joy that deified the messenger.

What part has Chamberlain really played in this dangerous business?

For a long time the capitalist government of this country has been split into different camps over foreign policy. The reasons for this are too long to go into here. It is sufficient to say that they are partly economic differences and partly differences of view as to what best serves the general capitalist interest. One group favours “minding our own business” and leaving other nations to mind theirs; another group urges a better understanding with Russia and the resisting of the imperialist policies of Germany and Italy; a third group presses for a general pact between England, Germany, France and Italy, and the shutting out of Russia from any influence on European affairs.

The third policy is the one that has been urged by the Chamberlains and their supporters for some time past. It was given expression to by Chamberlain on the eve of the Munich meeting when, in his Parliamentary statement, he criticised the provisions of the Versailles Peace Treaty.

Even while a member of the Baldwin Government, which had taken half-hearted measures to resist Italy’s policy in Abyssinia, Chamberlain made clear his disagreements on foreign policy. Sir Charles Petrie, an admirer of Chamberlain, describes the circumstances of the public statement in 1936 and, at the same time, made plain the nature of the support behind Chamberlain. He describes the incident as follows:

“Mr Chamberlain stepped into the breach. On the 10th June he was the guest of honour at the annual dinner of the 1900 Club, and he took the opportunity to declare against the continuance of Sanctions. The effect was tremendous. An audience which represented the wealth and power of Great Britain cheered the Chancellor to the echo” (The Chamberlain Tradition, page 249).

Since Chamberlain became head of the Government, foreign policy has changed its direction. The efforts of Government diplomacy have been turned towards finding a basis of agreement with Germany and Italy and the weaning of France away from its alliance with Russia.

The Munich conference of the four Powers appears to have been a long step towards accomplishing this object, though it occurred under dangerous circumstances, with the threat of war hanging over it. The fact that Czechoslovakian unity was sacrificed in the process was a small matter to the imperialist powers concerned.

The attitude of the Chamberlain group towards Italy’s Abyssinian venture and Germany’s march on Austria, gave Hitler a hint that further territorial conquests would not be seriously opposed providing these conquests did not interfere with British capitalist interests. When Chamberlain made his first trip to Hitler, on what was wrongly presumed to be an effort to save Czechoslovakian independence, he evidently went with the intention of being a party to the slicing up of that territory. His explanation in Parliament, on the eve of his last visit, makes this clear to those who examine the statement critically.

Taking into consideration the nature of Chamberlain’s foreign policy, as briefly outlined, the war situation out of which he “rescued” peace was largely of his own making.

While the Prime Minister was basking in the sunshine of mistaken adulation, one of his supporters pointed out that the real danger that menaces the interests of British capitalists is outside of Europe. On the morrow of the Munich pacts, while Germany was sending emissaries to Turkey and Yugoslavia, to widen its markets and its sources of raw materials, British politicians were heaving sighs of relief and turning to face “the danger again displayed by the Dominions and India, which has not passed unnoticed in Europe”.

The last remark is taken from an article in the Evening Standard (October 3rd) by Sir Arnold Wilson, who also makes the following significant statement:

“The Parliamentary Opposition parties are representing the redrawing of the map of Europe, now in progress, as a victory for Hitler, which it is, and a defeat for Britain, which it is not”.

This is another way of showing that Chamberlain went to Germany prepared to accede to the plans for dismembering Czechoslovakia. And why not? What does it matter to the British capitalist class whether the Czechs are independent or incorporated in Germany? The “National Honour” idea is a myth only invoked when it suits the interests of our rulers to beguile us with it. If Chamberlain, as is claimed, really set out to help Czechoslovakia, then “National Honour” went down on its knees before Hitler along with Chamberlain. Or, as the Daily Express (October 3rd) put it more genteelly:

“But this fact must be recognised by all: Britain accepted the Munich Agreement because our defences were not in a condition enabling us to take any other decision”.

This plea relating to the defences is being popularised as a means to obtain workers’ support for A. R. P. and similar defensive programmes—with all that these things will eventually mean.

One piece of information, relating to the crisis, that has now some significance was published in the News Review on July 14th, over two months before the crisis occurred:

“‘August, 1914’, is a date poignant with memories. What is it that makes Georges Bonnet, France’s Foreign Minister, so mysterious about August 1938?

To journalists who discussed the holiday question with him last week, Bonnet’s tendered the advice, ‘Certainly, take your holidays in August, but don’t leave Paris if you can help it’.

Though pressed for an explanation, he refused to say more than that ‘there will be a great deal to do,’ and that he himself would be at his desk throughout the month”.

What was in Bonnet’s mind? It could hardly have been war. Was in Godesberg?

The shameless diplomatic methods adopted have misled a number of people into believing that the whole business, including the threat of war, was a fake, deliberately contrived to secure acquiescence in the provisions of the Munich Agreement.

Two writers in the New Statesman (October 8th), J. M. Keynes and Robert Dell, make out a plausible case to show that it was a put-up job. That the crisis and the eleventh hour conference, with its solution, had been arranged beforehand. Although there are curious incidents that lend colour to this view, there are solid objections to it. The risk of war did ultimately enter into the game. Apart from other reasons it is too much to allow that a capitalist government would go into the huge expenses of war preparation, running into over £20 millions, either to lend substance to the shadow or for practice purposes.

The threat of war appeared in the scene because Chamberlain, in shaping his policy, apparently overlooked the fact that Hitler might not be inclined to bargain over territory that he felt strong enough to take if he wished to do so.

One purpose, among many, has been served by the crisis. It has been used as a means for enabling the British and French Governments to recognise officially the Italian conquest of Abyssinia without too much sanctimonious dust being raised about it. Now the way is open for British capitalists to invest freely in Abyssinia and to share with their Italian brothers the wealth squeezed from the Abyssinians.

In this time of stress where did the self-styled leaders of the working class, the Labour and Communist Parties, stand? The answer is easily given. They stood ready, if necessary, to man the guns and shoulder the burden of Empire in the mistaken idea that they were defending democracy against autocracy. Which shows how easy it is to divert movements that are anchored in the shifting sands of mere discontent. Such movements are easily directed into channels that serve the interests of the capitalists. The experience of decades has shown that when the cry “the country is in danger” is raised, the propertyless workers are urged by their leaders to flock to its defence, and to be ready to lay down their lives for a system that does not even guarantee to them the satisfaction of their elementary needs in food and shelter.

Over and over again the workers have been told by the Labour Party and the Communist Party that capitalism is on the down-grade, and that therefore they cannot hope for much improvement in wage conditions. Yet the country has been shown lately to be so wealthy that it could afford to throw away millions of pounds’ worth of goods in defensive measures, when it was believed that war threatened. Under a sensible social system workers would have bread instead of gas-masks.

Now that a great drive for armaments is proposed, the Labour and Communist Parties are logically bound to support it owing to their attitude during the war scare. This fact has been seized upon by all influential newspapers, which point out that the country is united in its desire to build up huge armaments.

Extracts from official sources show clearly the folly and the panic of those who claim to lead the workers.

On September 27th the Daily Herald published an article by the Editor, which contained the following statement:

“If there is war, it will be faced with calmness, with resolution, with unshakable courage. All that could be offered to Germany in honour and justice has been offered—far more than that, indeed . . . But if war there must be, since Herr Hitler is set on war, then it is better that it should be now, when Britain has strong allies beside her and to support her, the united opinion of the civilised world, than hereafter, when Germany, by successful aggression has won the mastership of Europe”.

Again, on September 30th, the Daily Herald spoke officially:

“In these last days two emotions have sustained the British people. One has been the desire for peace, if peace consistent with honour were possible. The other has been the determination to stand firm, if necessary to the ultimate degree—for the great principles of equity and justice in international affairs by which alone civilisation can flourish”.

International Information (September 12th), a typed sheet issued by the “Labour and Socialist International”, contained this statement:

“Whatever the risks involved, Great Britain must take its stand against aggression. There is now no room for doubt or hesitation”.

The above quotations are sufficient evidence of the Labour Party’s readiness to back the Government if war had been declared. The workers should also note also the insistence on “Honour”, “Justice” and “Equity”, all of which, it was contended, would be flouted if Czechoslovakia were split up. It is another example of the fatuity of the utterances of Labour when one remembers the official view of 18 years ago. In 1920 the Labour Party declared:

“Permission to the predominantly German areas of Czechoslovakia to determine their political future should be granted”—Quoted by the Evening Standard (September 16th).

If it were honourable, just and equitable for these areas to determine their political future in 1920, why has it become dishonourable, unjust and inequitable for them to do so now? Above all, why is it necessary that thousands of lives should be sacrificed now for something that was quite proper 18 years ago? The plain fact is that the Labour Party leaders do not know where they are.

The Communist Party is in a like position, and in addition responds blindly to the changing signals from Moscow. On October 3rd the Daily Worker published an article by the Editor. The following extracts from it are interesting as a logical interpretation of the Communist Party’s demand that Britain should stand firm in opposition to Hitler’s designs on Czechoslovakia.

“Had war broken loose on Saturday, as seemed almost certain up till Friday, the corpses of hundreds of thousands of men, women and children, would now be strewing the streets of Prague, Paris, Berlin, and even London”.

(. . .)

“That the ‘peace terms’ signed by Chamberlain are such that they strike a mortal blow at the interests and security of the British people”.

(. . .)

“The leaders of the British Labour Movement have to bear a great measure of responsibility for the sullying of British honour. For they who had the power to mobilise a tremendous public opinion, powerful enough to compel Chamberlain to have stood resolutely by France, Russia and Czechoslovakia, fell into the trap of assuming that Chamberlain was intent upon making a stand against Hitler, when actually he had no such intention”.

(. . .)

“There must be no further confidence in Chamberlain. Labour must stand firm in Parliament to-day and give a lead which will rally all the truly patriotic and progressive forces in Parliament against the shameful Munich betrayal”.

Two days later the Secretariat of the Communist Party repudiated the article. But they probably did so because it was too outspoken a statement of the logic of their position—that Britain and France should take a strong line against Hitler. That this would in all probability have led to war is shown by Russia’s war preparations and Litvinov’s explicit statement that Russia was prepared to join Britain and France in going to war in aid of Czechoslovakia if it were attacked.

It must be clear to anyone not blinded by prejudice that the Editor of the Daily Worker (who presumably was familiar with the attitude of the Party of which he was an official spokesman) based his article on Communist policy.

The Communist Party, like the Labour Party, has completely changed its attitude on Czechoslovakia. It has gone even further in its change of front. Consider its present insistence on Britain rallying to the support of Czechoslovakia and resisting the march of “reactionary Fascism”, and then examine the following quotation from The Struggle against War, and the Tasks of the Communists, a 6d pamphlet issued by the Communist Party of Great Britain in 1928:

“In the last imperialist war the Allies made use of the slogan ‘Fight against Prussian Militarism’, while the Central Powers used the slogan ‘Fight against Czarism’; both sides using the respective slogans to mobilise the masses for the war. In a future war between Italy and France, or Yugoslavia, the same purpose will be served by the slogan ‘Fight against reactionary Fascism’, for the bourgeoisie in the latter countries will take advantage of the anti-Fascist sentiments of the masses to justify an imperialist war” (page 14).

“In Czechoslovakia and in the Balkan countries, in Italy, in France, Spain, Belgium and Great Britain (Ireland) there are also oppressed nationalities. The Communist Parties must support the liberation movement of the oppressed nations and national minorities in all these countries, lead them in the revolutionary struggle against imperialism and unreservedly champion their right to self-determination, which must include the right to complete separation” (page 31. Italics in the pamphlet).

It is doubtful if anyone but the Communist Party could make such a blatant and complete somersault in policy. Possibly the greatest joke of the whole tragic business, though it might have been a tragic one, is the spectacle of the Communist Party urging the British and French workers to be ready to lay down their lives in defence of democracy—and “bourgeois” democracy at that!

One thing at least can be said. Chamberlain’s actions were consistent, in line with his views on Czech dismemberment and his desire for unity with European Powers. But the attitude of the Labour and Communist Parties is a complete reversal of their former views. They held previously that Czechoslovakia should be allowed to be split up—in the name of “Justice” and “Liberty”. Now they want it to remain intact in the name of the same deities.

The reversal of policy by the latter two parties, just as much as the tricky diplomacy of the Chamberlain group, should be a warning to workers not to be misled by high-sounding phrases, but to look behind these phrases. Base their attitude on their class interest alone and they will not be led into the support of groups or parties that pursue a policy which obscures the fundamental antagonism of interest between worker and capitalist, of all races, colours and creeds.

The attitude of the Labour Party, the Communist Party, and others of like views, relating to the position of the Czechs, is due partly to fright, which has developed an acute attack of anti-Fascitus. They are prepared to see cities littered with the corpses of hundreds of thousands of working men, women and children, for what? To prevent what would be in the main merely a change of rulers.

While the workers of the world are prepared to put up with capitalism, and all that capitalism means, a change of rule is a minor question. Certainly not worth a war which would put back the movement for Socialism amongst both victors and vanquished. The present position of Germany, Austria and Italy is a striking illustration of this fact.

In conclusion, we must stress the fact that the only attitude for the workers to adopt, if they would free themselves from the horrors of both war and peace, is to organise together for the purpose of establishing a system of society in which the wealth of the world will be commonly owned by all the people of the world.

Germany Stages a Come-Back (1938)

From the October 1938 issue of the Socialist Standard

The crash in Wall Street put an end to the flow of money and credits across the Atlantic. German capitalism sang “Don’t let the river run dry.” Short-term loans in Germany were now called in, and there was a rush on the banks. The number of small businesses which went under is legion, and monopoly capitalism (giant trusts) alone could survive the deluge. Unemployment and bankruptcies went up by leaps and bounds. This condition, whilst tragic, served a useful purpose. It enabled the mighty German industries (built by American money) to shake off the foreign fetters, America being in a mess. In this way the gigantic plant and production, with new rails, roads, etc., passed into “Aryan” hands.

The era of monopoly capitalism needs a corresponding moulding of the workers. It needs a human conveyor belt, a producing class as automatic as a machine. How can this be done? Two ways! Eliminate those who think otherwise (always a comparative few) and bluff the unthinking (the vast majority). In Hitler and his gangsters they saw the very instrument, so, placing their money at Hitler’s disposal, they built up their (industrial capitalist) machine. The millions of workers, not understanding Socialism, fell for demagogy of the Nazis, who cunningly used the term “National Socialist.” This cannot happen if the workers know the meaning of Socialism.

Capitalism in Germany having consolidated itself inside, now has to move outside. Fascist or Kaiser, the same problem remains, the problem which no capitalism can evade, the problem inherent in the very marrow of its bones—how to find new markets and new sources of profitable exploitation. Confronting Germany is the same circle as in 1914. French and British capitalism are holding on to their spoils.

The simple rule, the golden plan.

Let him take who may, let him keep who can. 

Playing on the chord of race, Germany spent huge sums of money in subsidising subversive movements in neighbouring territories. This, however, is a two-edged sword. It was quite an easy task to murder and pillage an unarmed, defenceless half-a-million Jews inside Germany, but outside—that is another story. Hitler expresses German capitalism aptly in “Mein Kampf" (page 699), when he says: "The inexorable enemy of the German nation is and always will be France.” French capitalism bars the way to western expansion, and that means British capitalism must stand by France. It also, of necessity, links Holland, Belgium, etc. Baldwin settled that by “our frontiers are on the Rhine.”

Barred from the west by the might of Britain and France, Germany has either to break this circumstantial unity or go east. Italy’s Near Eastern adventure in Abyssinia roused British and French capitalism; both saw an unexpected menace to their dominance in that part of the world. Their anti-Italian attitude gave Germany its chance. Up to this period Italian Fascism ('knowing the breed) did not relish a brother Fascist as a neighbour, and was looked upon as a factor against the eastward trend of Germany. The new situation, however, created a new orientation. It brought Italy and Germany together as “victims” of French-British capitalism and wound up with the Berlin-Rome axis. In this fashion was split the unity of forces against Germany westward and the move eastward facilitated.

We must again quote Hitler in his “Mein Kampf”: “ We stop the eternal march to the south and west of Europe and turn our eyes towards the land in the east.” In addition to the east being the easiest way, it was the safest way. The States en route were small and could in no sense put up much of a fight on their own, with the exception of Russia, who, from a military standpoint, would be a tough customer to tackle, but this was the route and economic necessity a remorseless master. Germany took a chance, invaded and seized Austria—it came off. The first stage had been overcome, and appetites grow by what they feed upon; Austria will do to start off with, but it is the industrial part of the old Austro-Hungarian Empire which matters, and that is now called—Czechoslovakia!

There, in twenty years, with French financial aid, has grown and developed a healthy, young and virile capitalism with a prosperous home-grown capitalist class, who mean to hang on to their right to exploit their workers. This they will do with the usual cries used by capitalism: national independence, or some such catchword. Once again German capitalism is challenging the capitalists of France and Britain. Can she do it? 

Lew.

The Reaction in Europe and the S.P.G.B. (1934)

From the July 1934 issue of the Socialist Standard

Observers of political events since 1918 cannot fail to have noticed the change that has come over the general tone and attitude of the various so- called “left” elements among the workers. For the first few years after the war these elements were jubilantly proclaiming the imminence of the end of the present social order upon the strength of a few beggarly political and other reforms on the Continent. Because sections of the ruling-class lost their grip of things in the defeated countries (giving way to others who were prepared to provide safety-valves for working class discontent and place certain belated limits on their exploitation) we were asked to believe that our masters were at the end of their tether and would be surrendering the earth in a few short years.

Now we are asked to believe a very different story by these self-same elements. In their eyes now there are no limits to the powers of the master-class to impose what is commonly termed Fascism and to interfere with the general development of the working-class. Why? Because, forsooth, these reforms are being filched from the workers within a few years of being won. To crown all, instead of realising the futility of reform policies, these elements proclaim ever more loudly the need for still bigger and better reforms.

What is the attitude of the S.P.G.B. towards this change of front on the part of such bodies as the Communist Party and I.L.P. ? Briefly, it is to maintain unchanged our hostility to these bodies and to demonstrate that the capitalist system remains essentially unchanged, in spite of the manifold forms assumed by the different national States which uphold it.

Having had experience of partial suppression during the War, we are far from holding that it is a matter of indifference to the workers whether they are allowed political expression or not. The Socialist movement, which is the supreme expression of their needs, cannot arrive at maturity under conditions of political reaction. In Engels' phrase, the Socialist movement needs elbow-room.

Experience shows, however, that reform organisations, no matter how numerous their members and supporters may be, cannot guarantee to the workers these essential political conditions of development. So far from their being able to check reaction their inability when they become the Government to solve the economic problem, has provided reaction with its greatest political stimulus. Helpless before the economic blizzard, they are equally helpless in the face of its political reflexion.

The progress of scientific organisation under capitalism results in the weeding out of the smaller capitalists and, as a result, anti-scientific notions, such as Fascism, readily find acceptance among such groups during a period of economic depression.

Socialism alone can free the productive forces from restrictions imposed upon them by different sections of the capitalist class. In the meantime, these sections strive each to impose the amount and kind of restriction suited to its own interest. The small capitalists, faced with impending bankruptcy, strive to hamper the large-scale concerns, but neither Hitler nor Mussolini has discovered how to save these obsolete little “captains of industry." The big fish continue to swallow up the little fish.

Every national State, no matter how it may describe itself, endeavours to utilise science to the maximum degree in perfecting its instruments of aggression and defence. Hence, for this reason, if for no other, it encourages the development of large-scale industry, which alone can provide these instruments. This applies equally to Bolshevist Russia, Fascist Italy and Nazi Germany—and to Britain, whether under “Labour” or "National” Governments. Large-scale industry progresses, in its turn, upon the ruins of small-scale industry.

This results in the development of the working-class, i.e., in the increase of its numbers, and in the growth of its organisation upon the industrial field. The intensity and scope of the class-struggle increase simultaneously.

The “dictators," Fascist and Bolshevist alike, attempt to repress this struggle by suppressing all political parties save one. The result is that discontented elements find their way into the one legal party, and are a constant menace to its unity. The “Dictator” preserves his authority over the different factions among his followers by avoiding going too far in any one direction. Hitler and Mussolini, Stalin and Pilsudski owe their positions to compromise just as surely as does Ramsay MacDonald, or any other Parliamentary politician.

In Britain, however, the capitalist class has long ago learned how to sink its internal struggles in critical moments, as a result of its more advanced economic development. It finds its solution, not in dictatorships, but in Coalitions or “National” Governments. The essential compromise is achieved by less violent means.

Under such conditions Fascists, so-called, are as little likely as Communists to become anything more than a thorn in the side of some larger party. Just as the Communists imported Russian jargon, but were utterly unable to bring over Russian conditions along with it, so the British Fascists will find that the novelty of teaching their political grandmothers to suck eggs will soon wear off. It is not necessary to credit Baldwin and Company with supernatural sagacity in order to anticipate that they will always be at least one move ahead of Sir Oswald Mosley.

The followers of this volatile politician may conceivably eclipse the Communists and I.L.P., but Socialists need not get excited about that. If the workers are still in the dark as to the direction to take, these latter bodies must accept a large measure of responsibility. They have induced the workers to support policies for which there was no chance of success. Disillusionment and apathy have, therefore, provided the material from which Mosley may build up a temporary alternative movement.

The S.P.G.B. is not a party of prophets, but whatever the immediate future may hold, we see no reason to deviate from the policy consistently pursued by us for thirty years. Just as we refused to be duped by Moscow, so we decline to be scared by what is happening in other Continental centres.

We realise that the master-class of this country possess means of intimidation as formidable as any that exist. We also realise that they control them through the support which they receive from the non-Socialist members of our class. By all means in our power, therefore, we strive to make Socialists.

Eric Boden

Blogger's Note:

See also the editorial, 'Reason or Violence', from this month's Socialist Standard.

Before Hitler (1938)

From the July 1938 issue of the Socialist Standard

The decade before Hitler was for German capitalism mainly a period of stabilisation and attempted recovery. Many new parties and groups were thrown up, ranging from different brands of Communism to currency reform fanatics and types of Fascism. The working class, not understanding Socialism, but merely possessing a reformist outlook and suffering deeply, alternately swung their support over to each fresh demagogue, and illusion and despondency were the inevitable result. American capitalism, after helping to smash Germany, now undertook to restore it. This served two purposes. It provided a new outlet for American investments and rebuilt a formidable competitor to Britain, as an offset against the growing Anglo-American rivalry for world dominance.

If it was possible to restore Germany to a healthy economic (capitalist) condition, the prospects would be rosy for profitable financial investment.

Through the Experts Commission (chairman, General Dawes) the chaotic reparations demands and methods of payment were regularised, and German firms, municipalities and local governments were able to obtain the foreign loans necessary to resume their former profit-making activities. The aim of the Dawes Plan was to make of Germany one vast international (and especially American) financial undertaking. American capitalists came to the rescue (on terms) of their German brethren, and in all but name Germany became an American colony. The foreign loans gave such an impetus to German trade that for five years (1924 to 1929) German capitalism was able to quite easily pay its interest claims and reparations demands. It was, however, without solid foundation, for its prosperity was only made possible with the assistance of foreign loans.

Guarantees to the American and other capitalists were included in the Dawes Plan. The State railways were taken out of the control of the Reich and placed in the hands of a company formed for the purpose. The Reichsbank was also taken away from the German Government and transformed into an instrument under “foreign” capitalist control, allowing pickings for the home capitalists, etc. French capitalism now received its reparations share regularly and withdrew its forces from the Ruhr. Herr Stresemann now devoted his energies to securing the evacuation of the Rhineland by the Allied armies, and out of this need of German capitalism was born the Locarno Pact and Germany joined the League of Nations. An era of mad speculation commenced; for the sake of American money German capitalism abolished some of its customs, including Martial Law. The Generals made way for the Dollar.

With the death of President Ebert an election took place (1925). The Social-Democratic candidate, Braun, came second with 8 million votes, withdrew their candidate and supported the nominee (Marx) of the reactionary Catholic Centre Party, as the “ lesser evil."

At the elections in 1928 the Labour Party obtained its greatest victory—over 9 million votes, and the Communists three and a quarter million—on a programme differing very little from the ordinary capitalist parties. Very few among the voters wanted or understood Socialism and were mainly captured by the promise to break the shackles of Versailles. The Social-Democrats now joined a “People’s Front" and entered the capitalist coalition government, demonstrating their political unity and ideological agreement with Stresemann and the capitalists in general. Germany had its Snowdens, MacDonalds, etc. The chief task confronting this motley crew was to make Germany “independent,” that is to say, now that German industry was yielding large profits, the home capitalists wished to limit the grip of American finance and reap the harvest for themselves. The rôle of the Social-Democrats was the same the world over—to act as the facade and to harness the working class to the capitalist machine. For this they received the usual Judas price—a share in the Government and the large salaries that go with it.

Severing became Minister of Interior, Wissell Minister of Labour and Hilferding Finance. The Dawes Plan was superseded by a definite settlement named after its chief-financier, Young. Under the Young Plan the payments to be made by Germany were definitely fixed for 60 years. German capitalism was now master in its own house and the control imposed by the Dawes Plan finished and the Army of Occupation marched out of the Rhineland. Just at this time the “world economic crisis” made its appearance. The financial smash in the New York Stock Exchange let loose a flood which swept everything before it. How this affected Germany will be seen in our concluding article.

Lew.

Capitalism—the real enemy: The case of Germany (1977)

From the September 1977 issue of the Socialist Standard

“Fascism is not an alternative to the capitalist
 system, but a way of running it”

The word “fascism” is one of the most loosely used terms in the political vocabulary. To call every other opponent a fascist, as the more hysterical elements of the left often do, is to reduce a term of political description to the level of political insult. Socialists do not oppose fascist parties, like the National Front, specially because they are fascist. We oppose them for their support of capitalism.

Fascism is not an alternative to the capitalist system, but a way of running it. When it seems inexpedient for the working class to have whatever exists in freedom of speech, assembly, press, and trades unions, and if the working class can be persuaded to support a regime which withdraws these rights (which a non-Socialist working class can), then capitalism is run along fascist rather than liberal lines. The working class can only positively defend democracy by organizing for Socialism.

That fascism is a part of capitalism, governed by the profit system as much as “bourgeois democracy” is can be seen by the events which took place in Germany under the Nazis. Like most groups which see themselves as being revolutionary the German National Socialist (Nazi) Party did not stand on an original platform. Indeed, at the outset they hardly stood for any programme at all, but for the negative policy of anti-semitism and the revival of Prussian greatness.

The dissatisfaction exploited by the Nazis related to the particular post-war problems of German capitalism. It was a non-competitive, highly concentrated, high-priced industrial economy; the political influence of the rural landowners was disproportionate to their size; there had been a high birthrate before 1914 with the resulting problem of an expanding working class demanding more and more from the developing German industries; and there was a large “middle class” of small businessmen with no political expression. The crisis produced by the first World War made matters even worse. The monarchy collapsed in 1918, leaving political instability; demobilized soldiers returned from the war feeling bitter and angry; a flood of east European refugees entered the country, many of them Jews; the liquidation of war credits meant that millions who had previously seen themselves as members of the “middle class” were thrown into extreme poverty; there was the additional frustration of an imbalance between the numbers of men and women. These problems are not new to capitalism in a crisis, and crises are an integral part of the capitalist system.

The Nazis were able to direct their political propaganda towards certain sections of the working class. Small shopkeepers, for instance, were easily attracted. Between 1882 and 1907 the number of small shopkeepers grew, but after 1907 they faced fierce competition from new department stores, some of which were owned by Jewish immigrants. The Nazis, because of their anti-semitism (and, to some extent, a leftist opposition to “big business”) exploited this discontent. White-collar workers, small farmers, and students were further groups to which the Nazis had a special appeal. Then, as now, the fascists realised that they would get nowhere without the support of the working class. The Nazis won it; the modern fascists may not.

Two things must be remembered about the rise to power of the Nazis. One is that without the support of the majority of workers it could not have happened. Capitalist government, be it fascist or liberal, could not be imposed upon a working class which does not want capitalism. Had the German workers been united for Socialism, then nothing could possibly have stood in their way. The second is that the Nazis had the support of important sections of the capitalist class.

When they came to power, what was more significant than the atrocities committed by the new tyrants (which are of interest to historians who like to see the past in terms of a battle between “goodies” and “baddies”) was their inability to offer the working class anything new.

They had promised to create a strong central authority to safeguard law and order (a cry of the British Tories). The Nazis succeeded in strengthening the rule of the state by uniting the party with the government: Hitler became not only total leader of the National Socialists, but complete leader of all Germany. The Enabling Act of March 1933 made the Reichstag powerless and invested full political power in the Chancellor. Adolf Hitler. A law of July 1933 outlawed all other political parties, and a law of January 1934 enabled the Nazis to change the Weimar constitution at will. The German army was taken over by the party, which was clearly satisfactory for the military as fascism meant a growing arms budget, evident diplomatic strength, popular support for militarism, compulsory conscription and, of course, a greater political role for the military.

Economically, the Nazi policies were consistent with the needs of the strongest section of the capitalist class. This was to cause division within the party. The business interests had financed the Nazis as an alternative to the power of the unions or, worse still, Bolshevism. On the other hand, there was a powerful left wing of the National Socialist Party, led by Strasser and Muchow, which preferred to stress the “socialism” of the Nazi Party, by which they meant nationalization.

For all their talk about destroying “big business” the Nazis failed to change the face of German capitalism, even refusing to close down Jewish department stores because they needed the taxes they were receiving from them. Income distribution did not alter under the Nazis and wages fell between 1934 and 1940, while the average net income of the better-off sections who paid tax rose by 46 per cent. As usual under capitalism the rich got richer while the poor stayed poor.

Essentially, fascism created no major changes in German society except, of course, for certain minorities, such as the Jews, the Catholics, and the dissidents. But these were a minority. For the majority it was work as usual; exploitation as usual. As Schoenbaum states:

In 1939 the cities were larger, not smaller; the concentration of capital greater than before; the rural population reduced, not increased; women not at the fireside but in the office and the factory; the inequality of property and income distribution more, not less conspicuous; industry’s share of the gross national product up and agriculture down, while agricultural labour had it relatively good and small business increasingly bad.

In September 1934 at Nuremberg Hitler declared:

The revolution has achieved without exception all that was expected of it . . . in the next thousand years there will be no new revolution in Germany.

Hitler was speaking of a change in the circumstances of German capitalism, not a social revolution. The former happens all the time—leaders come and they go—but the latter means a fundamental change in social relationships. The Socialist Standard of June 1939 clearly explained the Socialist attitude to fascism and democracy:

Democracy for the working class can only be consolidated and extended to the extent that the working class adopts a socialist standpoint. To renounce Socialism so that democracy may be defended means ultimately the renunciation of both Socialism and democracy. It cannot be emphasised too much that the struggle for democracy is bound up with the struggle for Socialism and not the struggle for Socialism bound up with the struggle for democracy.

Steve Coleman

The Politicians and the crisis: Part 2 (1977)

From the September 1977 issue of the Socialist Standard

Link to Part 1.

These are the times when unthinking workers look for scapegoats, as they did in Germany in the latter period of the Weimar Republic. There the once proud and powerful Social Democratic Party (SPD) were in government; they unwittingly paved the way for the Nazis. Hence, the concern of the political leaders of Western Europe, North America and Japan. They reason as follows.

The slump of the early ’thirties undermined the established regimes in places like Germany and Japan and many other less powerful countries too. Imitative fascist-type parties sprang up all over Europe (some holding power), gaining support from disenchanted workers. In the case of Germany the Nazis gained power through the ballot box in 1933. In Japan the militarists managed to mobilize popular support against the existing Liberal administration because of the economic situation—unemployment and deflation—not, as now, inflation. The new regime began reflation in 1932 and before the bottom of the world slump had been reached Japanese industry began to recover being propelled along by an aggressive drive in export markets.

This was bad news for capitalist interests whose markets were being successfully penetrated by Japan, e.g. the colonial possessions of the Western industrial states were taking an increasing volume of textiles. This was one of the reasons for “protectionism” of the 1930s, which the governments now wish to avoid. This encouraged Japanese capitalism, with militarists firmly in the saddle, to possess colonies of their own. In 1937 they attacked China, having as early as 1932 driven the Chinese out of Manchuria without any formal declaration of war.

War economy

Germany from 1933 onwards pursued a twin policy of re-armament and so-called "economic self-sufficiency”. Unemployment decreased (although it was still above 1 million in 1936) and the armaments industry and its adjuncts, like the new autobahns and airfields, increased. Many workers were employed on the work connected with numerous Nazi rallies; the 1936 Nuremberg Rally alone cost £2,000,000 to stage. To limit imports, license schemes were introduced and synthetic materials developed, partly to deal with Germany’s balance of trade problem and also geared to their “war economy”.

Germany entered into trade arrangements with countries in South-East Europe and Latin America. These countries agreed to take more exports from Germany in exchange for imports from them, but their volume was only 69 per cent. above 1929; whereas Britain’s exports were then 83 per cent. above that year. Britain had achieved this advantage by bi-lateral arrangements with various countries. The Commonwealth and Empire countries increased their import preferences for each others’ goods and as mentioned above placed restrictive quotas on textiles from Japan.

In spite of all this, unemployment in Britain was still over 1.3 million in 1937. In the June 1939 issue of the Socialist Standard was the following:

When Hitler for the German capitalists says that Germany must expand or explode, find markets or perish, he meets his opposite in Mr. Hudson. British Secretary for Overseas Trade who said in Warsaw on March 21st [1939] that “we are not going to give up any markets to anyone . . . Great Britain is strong enough to fight for markets abroad. Britain is now definitely going to take a greater interest in Eastern Europe”. (From News Chronicle, March 22, 1939). Fighting that at present takes the form of words, trade agreements, loans, guarantees against aggression etc. may. as in 1914 turn into an armed conflict, and that armed conflict will be yet another war produced by capitalist rivalries.

This area of Eastern Europe was Germany’s existing and expanding sphere of influence, for recovering territory lost in the previous imperial conflict—the Sudetenland from Czechoslovakia, Danzig and the Polish Corridor, and Memeland from Lithuania. Germany also had eyes on the Rumanian oilfields (hence the British guarantee to that country in spite of the fascist regime there), and the wheat-growing areas of the Ukraine, in Russia and Poland.

These brief references are to the seeds which helped produce the second world war, and the politicians at the recent London summit conference said so quite openly. By any sense of logic working-class ears should be pricking up at these statements, questions should be asked and conclusions drawn. The Socialist Party does its best to help draw these conclusions and to develop a Socialist awareness.

It was noteworthy that Mr. Fukuda was particularly alive to the dangers of the present slump. He was a young diplomat in London in 1933 at the time of the World Economic Conference which broke up solving nothing, to be followed by “beggar thy neighbour” policies which were already under way prior to the conference. One of the major factors preventing even formal agreement was America’s refusal to stabilize the dollar; Roosevelt having taken them off the Gold Standard with a view to raising US commodity prices as an inducement for investment by the industrialists. This caused the US dollar to fluctuate wildly in the foreign exchanges. The delegates from the other countries at the conference wanted America to stabilize back on the Gold Standard: this Roosevelt refused to do, being pre-occupied with the domestic effects of the Depression.

Crisis capitalism

This was and is crisis capitalism. Predicament—the conflict between national economic interests and the stability of the international trading and monetary systems. This was recognized well enough in 1933. 

The journal The Round Table declared, some months before the Conference at the time of the Imperial Economic Conference at Ottawa, that "within a few months, conclusions must be reached in the financial and economic field, the effect of which will probably be decisive for or against the happiness of at least one generation of human beings all over the world.”

In September 1933, two months after the conference broke up, the same journal commented: ‘‘The great international conferences have come to little. The pulse of the Disarmament Conference is beating feebly (which began in June 1932) . . . The World Economic Conference has failed to reduce the obstructions to international trade, or even to make a tentative approach to agreement upon a solution of the world’s monetary problems”.

In the Daily Telegraph of May 9th, 1977, the day after this year’s conference, in an Economic Commentary article ‘‘Best view of the summit in few months” the author, Rodney Lord, stated: ‘‘It is idle to expect any great progress on persuading countries to regulate their economies for the general benefit of international stability. Politicians look first to the interests of the people who elected them.” The latter part of that quotation cannot go unchallenged of course—but we know what he means.

Politicians are the custodians of nation-states in a competitive world—that is, custodians for the capitalist class of their particular countries. At the same time they depend on the working class to go along with the arrangement, and have to try to placate them when it is necessary.

Conflicts of ‘national interest’

This conflict of national interest and international stability, with its inherent dangers, was demonstrated in Tokyo only four days after the end of the Economic Summit.

There were reports of a fire in an oilfield in Saudi Arabia which supplies over 30 per cent. of Japan’s crude oil imports. Prices fell on the Tokyo stock market and the Ministry of International Trade and Industry assured the Press that the fire would probably not have a serious effect on Japan’s supplies in the long run.

At the same time Mr. Fukuda, the Prime Minister, told a meeting of business leaders that the government is to press the case for Japan to reprocess spent nuclear fuel. He said that at London he had the ‘‘strong impression” that it will be difficult to get America’s approval because of President Carter’s “deep-rooted opposition”. However, Mr. Fukuda assured the businessmen that he was “most determined” to negotiate the issue with the US independently of other countries. The Japanese, apparently, have been shocked by the American President’s nuclear energy policy (from a report in the Daily Telegraph, May 13th).

An indication of Japan’s problems—even though being currently the world’s most successful economy— is the news that from the end of 1971 to the end of 1976, 30,000 shipyard workers lost their jobs. It is estimated that another 25,000 will go before the end of 1978, which is nearly the total workforce in British yards. (From the AUEW journal for May 1977.)

On May 9th the Daily Telegraph reported that British TV manufacturers were protesting to the Government that Japanese TV manufacturers were “bent on destroying” the British industry. This was in response to the plans of the Hitachi Company to build a factory at Tyne and Wear.

Commercial ‘aggrandisement’

The British businessmen said that there was already over-capacity in the industry. 1,751,000 sets were made in 1976 as against 3,000,000 in 1973, and Hitachi’s arrival would increase to 400,000 the number of Japanese colour sets made in Britain. Two other Japanese companies are already established here. Many more jobs would be lost—up to 6,000—than would be created, it was claimed. Hitachi had already a 20 per cent. interest in a Finnish company which is expected to export to Britain for assembly a substantial part of 800,000 total output of colour tubes. It is part of a policy of “commercial aggrandisement” in Europe, say the British capitalists.

No wonder Mr. Fukuda and the other statesmen are worried.

Frank Simkins

To be concluded