Cooking the Books: Keynes rides again (2008)

The Cooking the Books column from the December 2008 issue of the Socialist Standard

It is not just the ideas of Marx that the current crisis is getting people to look at again. It’s also those of Keynes. In fact it now seems to be official government policy. In October the Chancellor Alistair Darling declared that “much of what Keynes wrote still makes sense” (Sunday Telegraph, 19 October). Then last month Gordon Brown himself, in America for a summit of the G20, “invoked the memory of John Maynard Keynes”, according to the Financial Times (15/16 November), proposing a typically Keynesian approach to the current crisis, right down to exactly the same terminology:

“Gordon Brown yesterday heralded an anti-recession strategy founded on tax cuts for low earners and further cuts in interest rates, in the hope that Britain will spend its way out of the downturn. Mr Brown . . . suggested that the government would use tax credits to help poor families since they were more likely to spend any money handed out. People on low income had ‘a higher propensity to spend if their credits are higher’, Mr. Brown said.”

Keynes was an inter-war years economist who was at one time credited with having saved capitalism. He argued that capitalism did not automatically tend towards full employment and that government intervention to increase spending was needed to ensure this. He was himself a Liberal, but his ideas were embraced by all three main parties in Britain. He was particularly liked in Labour Party circles as his theories seems to justify their reformist attempt to redistribute income from the rich to the poor with their “higher propensity to spend”.

As it happened, post-war Britain did have more or less full employment for twenty or so years after the war, but this was more due to the expansion of world markets than to Keynesian “demand management” policies. When, in the mid-1970s, world market conditions changed, Keynes’s policies were shown not to work. Instead of stimulating a revival of industrial production they added a new problem – rising prices through currency inflation, which in turn led to periodic devaluations of the pound. In all previous slumps prices had fallen, but the implementation of Keynesian policies in the 1970s meant that they continued to rise. A new word was invented to describe the result: “stagflation”.

In Britain the funeral oration on Keynesianism (Keynes himself had died in 1946) was delivered by the then Labour Party Prime Minister, James Callaghan, at the 1976 Labour Party Conference:

“We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour, that that option no longer exists and that in so far as it ever did exist, it only worked on each occasion since the war by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment” (Times, 29 September 1976).

Or, as Keynes’s biographer Lord Skidelsky put it, “Then Keynesian policies suddenly became obsolete and the theory that backed it was condemned to history’s dustbin” (Times, 23 October).

It is a sign of the desperation of Brown and his government that they have been forced to rummage through the dustbin of history for a policy to deal with the current financial crisis and coming depression. Spending your way out of a crisis was tried by the last Labour government and, as Callaghan was forced to admit, it didn’t work. There’s no reason to believe it will this time either.

Out of the blue (1978)

From the October 1978 issue of the Socialist Standard

So after all the speculation about the fifth and the twelfth, Callaghan has decided that the Labour Party has a better chance of winning the General Election if it is held some time next spring rather than this month. In other words, he is tacitly acknowledging the failure of Labour’s attempts to make capitalism run in the interest of the majority and is desperately hoping for some improvement in working-class living conditions between now and the spring so that he can claim credit for it.

Of course he did argue that living standards had been raised recently (though we can surely be forgiven for failing to have noticed this). Some political commentators have claimed that this “temporary boom” was engineered in order for Labour to win an election — as if capitalist governments had ever been able to control even temporarily, the booms and slumps of the economic system. But Callaghan rejected any such suggestion, saying that “I am not proposing to seek your votes because there is some blue sky overhead today”. Any party who could ensure permanent blue skies would of course win every election hands down. But it can’t be done: governments really do have about as much chance of taming capitalism as they have of controlling the weather.

Callaghan went on to say: “I ask every one of you to carry on with the task of consolidating the present improvement in our country’s position. Let us see it through together.” We would hope that workers’ reaction to this empty rhetoric will not be to attempt to “see it through” but rather to “see through Jim”, and indeed to see through the utter uselessness of reformist politics. The difficulties which Callaghan admitted he could see ahead mean continued misery and continued poverty for the working class. This is inevitable as long as class society lasts, and it is why Socialism is needed NOW!

Blogger's Note:

For more background on this wee will-he-or-he-won't runaround, check out this Guardian article from 1978 about Sunny Jim, the TUC conference and the warbling of  '. . . waiting at the church.'

The Review Column: Collapse in South Arabia (1967)

The Review Column from the October 1967 issue of the Socialist Standard

Collapse in South Arabia

The news of the collapse of the Federal government in South Arabia, and of the British acceptance that they must now deal with one or other of the outlawed nationalist movements there, induced a weird if well-known feeling that we have been here before.

The British presence in the South Arabian Federation, and their propping up of the government, revolved around the importance of the Aden base in protecting British interests in the oilfields of the Arabian Gulf.

It was for this that British soldiers were killed in the area—and themselves did a fair bit of killing. The battle between the occupying troops and the Nationalists had all the usual nastiness, including the atrocities committed by both sides.

It might have been possible for the British “experts” who were running the show to consider the history of similar situations in many other parts of the world—Ireland, Algeria, Cyprus to name only three.

The lesson they might have drawn from all these conflicts is that it is impossible to suppress a nationalist movement for ever and that, after a lot of blood has been shed, a lot of damage done, a lot of hatred provoked on both sides, the occupying government comes to recognise the inevitable and does business with the people it has been calling cowardly terrorists.

Then the “terrorists” became respectable. They attend conferences in sleek limousines, they smile at, and shake hands with, the men who so recently placed a price on their head. They often go on to apply their own suppression to former comrades who rebel against what they consider a sell-out, or who disagree on some other issue.

All this now seems likely to happen in South Arabia. Which not only goes to show how blind are the “experts”, but also how persistent, tangled and poisonous are the conflicts of capitalism, and to what murderous lengths men are driven in their efforts to resolve them.

Half a million unemployed

As the Ministry of Labour’s doleful figures come out, let it not be forgotten that it is a Labour government which says that it has created half a million unemployed.

The Labour Party hold the theory that a government can produce, or abolish, unemployment at will. Whether this is true or not is beside the point, which is that Labour are saying they are responsible for the rise in unemployment, that it has come about as a result of their deliberate policy.

It is not convenient, now, for them to remember some of their promises. Like this one, by James Callaghan at their 1965 conference:

… he had not joined the Labour Party to create unemployment. He was certain that the measures being taken, through regional planning, were the right ones to maintain full employment. (The Guardian, 1/10/65.)

It is not convenient, now, for Labour to remember that the wage freeze was always supposed to be the alternative to unemployment. This was Callaghan, again at the 1965 conference:

This problem of getting increased productivity would be solved either by unemployment and substantial deflation, or by a prices and incomes policy: there is no other way.” (The Guardian, 1/10/65.)

As it turned out, the working class have got it all; a wage freeze, unemployment and what is called “deflation”.

Presumably, if they were pressed on the matter, the Labour Party would still say that this is Socialism. For one thing, their policies seem to be holding the support of a majority of trade union leaders, although what these same leaders would say about the same policies if they came from a Conservative government hardly bears thinking about.

To some extent, then, Labour have had things their way. What it amounts to is that in 1964 there was a dirty job to be done for the British capitalist class and Labour have done it.

The TUC, does it matter?

“I do not think the . . . motion really means a great deal in this context, one way or the other.” That was George Woodcock at this year’s TUC and there are no prizes for guessing why he has suddenly discovered that some of the decisions of this annual gathering don’t really matter.

A long time ago, the Labour Party leadership made it clear that whenever its Annual Conference passed an inconvenient motion it suddenly lost all power and significance as a conference. Only when its decisions were in line with official policy did the Conference become the democratic mouthpiece of a great movement.

Now, apparently, the same thing applies to the TUC. The motion Woodcock was referring to was one from the Shopworkers’ Union which, among other things, protested about unemployment, rising prices and the wage freeze.

It seemed certain that the motion was going to be passed —as it was, despite the application of “Carron’s Law” to the AEU vote—so of course the only thing left for the politically motivated TUC leaders to do was to give advance notice that it didn’t mean anything.

There is no record that Woodcock was equally clear about the TUC’s irrelevance when they later approved motions which supported the government—one on the Wednesday from the ETU which recorded appreciation of the government’s efforts to reduce overseas spending and one on Friday, moved by Carron, which said that the trade union movement should support the government.

It is fair to ask why the TUC bothers to have a Congress, if it is allowed to pass only those resolutions which are approved by the platform. It is fair to ask whether the TUC leaders think it democratic that any decisions it makes which are inconvenient to a Labour government should be ignored.

Perhaps the solution is to hold the Congress only when there is a Conservative government. Then Woodcock and the other leaders can accept the critical motions without any qualms.

Unless, of course, the union membership become aware of their standing and interests under capitalism—and of the job the unions should be doing.

Exit a formidable opponent (1987)

From the September 1987 issue of the Socialist Standard

Of all the MPs who did not return after the election to the House of Commons none expose more clearly the present purpose of parliament, the motivation of their party and the unpleasant realities of capitalist politics than the recently ennobled Lord Callaghan.

After their defeat the Labour Party are, once more, in the throes of something called "Bringing The Party Up To Date", which actually means purging themselves of any policies or so-called principles which are suspected of losing them votes. A letter from "Lifelong Tribune Supporter", Walter Cairns, of the University of Dundee, in the Guardian of 22 July put it like this:

Kinnock and Gould . . . enjoy my unqualified support in their endeavours to refashion the party's image into that of a modern and efficient movement for socialism.

Among the contradictions and misconceptions which crowd this letter from an eminent academic lawyer, one thing stands out. Even while they are advocating policies like refashioning the party image, based on the cynical presumptions of a capitalist society, Labour supporters are capable of claiming that they are doing so with the object of establishing socialism.

If the Labour Party — somehow, somewhere. sometime — does stand for socialism it must follow that its membership consists of socialists — of people who understand socialism and are agreed about the urgency of setting it up in place of capitalism. It must also follow that these people think, speak and act like socialists; for example they oppose any discrimination based on sex or race, they deny that production for profit is a constructive social motivation, they understand that a class society must give rise to class conflict, they reject the principle of political leadership. Applying these standards to the record of James Callaghan reveals conclusive evidence about the authentic character of the Labour Party — that it is not a socialist party but one which stands, quite clearly, for capitalism.

Callaghans early life was an impoverished struggle from which, not untypically, he drew the wrong conclusions. For one thing, the extremities of his family's poverty had something to do with his father's death in 1921, while he was still young, as a result of what he went through in the Navy during the First World War but this did not deter Callaghan from joining the Navy himself during the Second World War. He had left school to become a junior clerk in the Inland Revenue and had risen through his union, the Association of Officers of Taxes. In 1945 he was returned to the Commons for one of the Cardiff constituencies — some prudently left-wing stances during the 1930s had attracted the attention and patronage of Hugh Dalton and Harold Laski. He passed the war quietly in Naval Intelligence. Perhaps after all he did learn something from his father’s death.

Callaghan's rise was something of a mystery to political observers. He had not gone to university, he was not charismatic like Bevan, or sophisticated like Crossman or earthy like Bevin. He had no gift for sweeping rhetoric or quicksilver repartee. What he did have, instead, was a dogged resolve to climb the greasy pole of political power and. to help in this, a cunning feel for many ingrained working class prejudices. Peter Walker, who in these matters knows what he is talking about, described Callaghan the Prime Minister:

We have a Prime Minister, who is good on television; who looks like Stanley Baldwin; who lives like Stanley Baldwin; and Stanley Baldwin with the vote of the Labour Party and North Sea Oil is a very formidable opponent. (Financial Times, 16 December. 1967.)

When the first Wilson government was elected in 1964, Callaghan’s eminence in the Labour Party was enough to see him installed as Chancellor of the Exchequer. This was an unusually tricky appointment. Labour's promise of prosperity through a massive surge in productivity in an age restless with the new technology had led to the setting up of the Department of Economic Affairs (DEA). a new ministry with a brief to blast away the Treasury’s cobwebs of financial orthodoxy. Callaghan, when he was Shadow Chancellor, had made no secret of the orthodoxy of the policies he intended to follow. Speaking at a Yorkshire miners’ summer school in 1962. he warned that ". . . substantial changes are necessary in the reorganisation of Britain’s economy and in the methods of wage-fixing", by which he meant formal "planning" of wage rises. In the same speech Callaghan denounced the Macmillan government for their handling of industrial relations and for governing the country by gimmicks. (Guardian, 28 August. 1962). Probably, the miners loved it. They could not have known that Callaghan was an admirer of, and a close collaborator with, Reginald Maudling, who as Tory Chancellor of the Exchequer was an important practitioner of government by gimmick:

There was a mutual liking and confidence between Maudling and myself. During his tenure of office he did not hesitate to talk privately and frankly to me about his concerns. I reciprocated during my period at the Treasury . . . (James Callaghan, Time and Chance, 1987.)

The Wilson government was dogged by the "central problem" of the balance of payments. They hoped to control the economy through the DEA's National Plan and through the joint Declaration of Intent by the government. the employers and the unions that the way to improve the world standing of British capitalism was for everyone to volunteer to be moderate and restrained about their income. It did not take long for the realities of capitalism to wreck that fantasy and for the Labour government to make moderation and restraint compulsory. At the Labour conference in 1966 Callaghan revealed that what they actually meant by "voluntary" was "under threat of compulsion”:

Those who wanted to force the government to use compulsion have had their way. Perhaps they are proud of their victory but they have done no service to the ordinary men and women of this country, nor to the trade union movement.

This speech also spelled it out that when the government talked about moderation in incomes they really meant in working class incomes — in wages. The income of the capitalist class (who are not "ordinary men and women") did not come into the reckoning.

According to Richard Crossman, Callaghan's apparent nonchalance concealed a panic at the continuing economic crises which at times left him virtually paralysed. For one thing he was under severe pressure to devalue the pound an issue on which he had not only nailed his colours to the mast but burned his boats into the bargain. In the Commons in July 1967 he again stated his opposition to devaluation as". . . not the way out of Britain’s difficulties". So when, in November that year, the government which had promised to raise real standards decided to cut them by devaluing the pound Callaghan had no way out. In what was described as a resignation he swapped offices with Roy Jenkins, to become Home Secretary. It was not a bad reward for a minister whose impotence in face of capitalism's crises had been so harshly exposed.

Callaghan's time as Home Secretary was notable for his pushing through in seven days the Commonwealth Immigration Act of 1968 — a panicky reaction to the prejudices maliciously excited by the likes of Duncan Sandys and Enoch Powell over the Asian immigration from Kenya and Uganda. His justification for this measure — that unless the public were confident that immigration was effectively controlled there would be continuing riots and tension (Time and Chance) may have secured a few racist votes for the Labour Party but it contradicted their claim to stand for the free, humane co-operative world of socialism and it was in any case a wretchedly specious argument for trying to appease the appetite of a dangerous prejudice.

Labour’s return to power in 1974 allowed Callaghan to become Foreign Secretary and when Wilson resigned in 1976 he moved predictably into Number Ten, a politician unusually experienced in the three great offices of state below that of Prime Minister. In theory, then, he should have been an historic success. In practice it was very different. His government soon decided that the agreement for voluntary pay restraint negotiated with the unions by Wilson and Michael Foot should be extended. They set a limit of five per cent and threatened sanctions against any company which settled pay claims above that figure. Healey, the Chancellor, was wielding a savage axe on public expenditure. aiming for cuts totalling £3,000 million over the next two years. Callaghan informed the 1976 Labour conference that Keynesian policies, which had once given theoretical sustenance to Labour manifesto writers, were now dead:

We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists . . .

This was greeted as a typical piece of Callaghan common sense; it took no account of the effect which the cuts were to have in, for one, the National Health Service:

Standards of care in the health service have drastically worsened through the lack of money, more work and shortage of nurses, the Royal College of Nurses said yesterday.

(Guardian, 31 October 1987.)

For a while Callaghan seemed to be getting away with those policies but resentment against the government deepened and the Labour Party lost a series of by-elections, most notably in mining and industrial seats like Ashfield and Workington. As their majority dwindled away Callaghan, rather than surrender power, came to an arrangement with the Liberals in which whatever was left of Labour policies were compromised for the sake of Liberal support in parliament.

In the summer of 1978 the unions began to indicate that they had had enough of pay restraint. Many trade unionists were employed in socially vital work for wages below what they could get on Social Security. After a week in the sewage works or the sewers, in ambulances or hospital kitchens they were compelled to scrabble for Family Income Supplement. In the previous winter Callaghan's government had used troops to break the firemen's strike but no detachment of Green Goddesses could have withstood the flood of disruption of the winter of discontent. Callaghan, the Prime Minister who had come up through the trade union movement. was in favour of trying to dragoon the strikers in a State of Emergency but settled for merely urging workers to betray their class interests by crossing picket lines: ''Everyone," he said in the Commons, "has the right to work and everyone has the right to cross a picket line. It is not a sacred object and I hope they will do so". (Guardian 24 January, 1979).

Labour optimism of 1964 was no more than a sour memory when, in March 1979, Callaghan's government were defeated on a motion of confidence and so were forced into an election. The DEA, the National Plan, the technological revolution, the planned growth of productivity and of incomes, were all consigned to the already crowded history of broken promises. In her diaries Barbara Castle described the end of Labour's dream as "stagnant output, high unemployment and falling living standards." This last was, of course, a reference to the condition of the working class for the capitalists were doing rather well. Healey had warned the rich that he would squeeze them until the pips squeaked but as Labour left office the income of the richest one per cent exceeded that of the poorest 20 per cent. In several senses the way had been paved for the age of Thatcher, which the Labour Party now regard as so calamitous. If there were any of what might be called justice in these matters. Callaghan should have shrunk, shame-faced, into obscurity. Instead he subsided into an honoured place on the back benches, with more time to spend on his adored Sussex farm. And when he announced his resignation from parliament he was quickly given a title as reward for all he tried to do, and did, for the interests of the British capitalist class.

His memoirs (Time and Chance) is a curiously passionless book, except when Callaghan launches into extravagant praise for some fellow political trickster. Criticism is, at worst, muted. Perhaps, after all, he does experience some twinges of doubt; perhaps what happened during those dismal years is too much to recall with any strength. He failed to keep a promise to do the impossible, to control an uncontrollable social system which operates on laws based on the interests of a small minority of parasites. In these fruitless endeavours he was indeed a formidable opponent — of the working class where he originated, the class who are the real producers in society. There is a useful lesson in his story. The significance of politicians is not their strength but their impotence and what this tells us about our class power to change society.

Ivan

Greasy Pole: Naming the day (2000)

The Greasy Pole column from the December 2000 issue of the Socialist Standard

It will not be long now before Downing Street goes onto Red Alert. All leave will be cancelled for the focus groupies, the pollsters and the spin doctors, as it is for the police when some great public disorder is in the offing. Come the First of May next year Labour will have been in power for four of the allotted five years, which means that Blair and his hangers-on must soon give serious attention to the date of the next election.

Whichever day they settle on and whatever anguish they go through in the process it will all be considered to have been worthwhile because there is general agreement that the timing of an election is vital to the eventual outcome. Since the party which is in power chooses the date they seem to have an overwhelming advantage; but if it were that simple no ruling party would ever lose an election. In fact the choice of date is sometimes given such importance that a prime minister who apparently loses power because they chose wrongly can expect that their days as leader are numbered.

Callaghan 

This is what happened to Jim Callaghan and John Major. Callaghan was under a lot of pressure to call an election in the Autumn of 1978 (he teased the Labour conference that year by singing a song about not being able to make up your mind) but he chose to wait until the following Spring and these few months turned out to be the Winter of Discontent. This was probably the final nail in Labour’s coffin but it is debatable whether their experience of government at that time was so happy and fulfilling that they should want to prolong it by a crafty choice of election day. They could hardly have claimed to be enjoying themselves, after episodes like the exposure of Wilson as a shoddy manipulator, Denis Healey’s persistent battle to hold down wages, the internal mumblings which eventually threw up the Gang of Four and the Social Democratic Party . . . Callaghan himself, who was a canny political operator, took the view that there had been what he called a “sea change” and there was nothing the Labour could do—including a clever selection of election day—about it. The voters had tried Labour government again, they had seen all too clearly that it could not live up to its promises so they felt like a change. In the usual sclerotic process of political preference, the voters decided that if they didn’t like Labour the only other possible course was to vote for a Conservative government.

Foot

It is unlikely that when Callaghan talked about a sea change he expected it to last for almost twenty years. Even worse for the Labour Party—during all that time there was only one election—in 1992—when they might seriously have dared to hope that their day was about to dawn again. In the first election after the defeat of the Callaghan government they presented a manifesto condemned by one of their leaders as “the longest suicide note in history”. And in case anyone thought they were serious about winning the election they chose Michael Foot, who as a vote-loser was in a class of his own, as their leader. In 1987, having elected Neil Kinnock as leader, in the hope that he would appeal to voters as the antithesis of Michael Foot, they lost again because it would have taken more than a clumsy windbag to overcome the entrenched Tory advantage. But in 1992 they seemed to think they had a real chance. They remembered the recent by-election results, they looked at the public opinion polls, they sighed with relief that the public opinion polls, they sighed with relief that the seemingly invincible Thatcher had been replaced by grey, whining John Major. They overlooked the fact that there was still too much ground to make up from the battering they had received in 1983. When he notched up his second successive defeat Kinnock knew it was time to go, to adopt failed the failed politicians’ guise of a wise, benign statesman and look around for one of those lucrative jobs they so easily drop into.

1997

By 1997 Labour had made up all that ground, and quite a but more, with not a little help from the Tories. There was, of course, the rampant sleaze among their MPs (or rather, as sleaze seems a way of life in the Palace of Westminster, the exotic exposure of it by Mohammed Al Fayed, who knows a thing or two about it himself). There was the open war over Europe, driven by the kind of bitterness which had John Major calling some of his most prominent ministers “bastards” and was so unnerving to any Tory who still thought that loyalty was their party’s secret weapon. There was the madness of John Redwood, Michael Portillo and his SAS speech, Ann Widdecombe justifying the shackling of women prisoners when they were in labour . . . Like 1979, it was a time of sea change. It was the Tories who were unelectable and Labour the party trusted to make all the voters’ dreams come true.

The fact that the years since 1997 have had the usual nightmare episodes will be weighing heavily with Blair as he ponders the date when he allows the working class to show how they judge his government. So far the government have not been hit by a recession, which allows them to claim to be controlling the economy through the stringent application of unusually perceptive policies. Blair must also be hoping that Jack Straw’s ambition to go down in history as a more grotesque version of Michael Howard will somehow stop people breaking the law. He will pray that there will be no more media-exciting scandals like Bernie Ecclestone and Formula One tobacco advertising, Lord Irvine and his expensive taste in furniture and wallpaper, Peter Mandelson and his fastidious needs in housing.

Power 

In all the excitement and speculation there will be very little attention given to the calculated cynicism implicit in the assumption that the date of an election will significantly affect its outcome. What does it say about how the working class regard their power to bring about the necessary basic, radical change in society, that they may vote Labour in December and Tory in May? That votes are cast, not in the actual experience of what capitalism does to people and how its political parties are unable to change things, but on how and when those parties pitch their appeal? What does it say about the parties who devote so much effort to this whole sordid process? Well, come next May, or whenever, it will be true to answer those questions in the only way the pollsters, spin doctors and focus groupies understand.

Ivan.

Time and chance (1978)

From the August 1978 issue of the Socialist Standard

If the lights are observed burning late in Number Ten nowadays, there is no reason to be worried about the Prime Minister suffering from insomnia. More likely he is sitting up with his advisers, juggling with the slide rule, metronome and egg-timer, trying to decide the date of the next general election.

There is, as usual, no lack of advice for him in this, from all those political hacks who earn their living writing clever columns in the newspapers, largely designed to show how basically easy it is to run British capitalism without all those tiresome crises and upheavals. But the timing of an election is more than a game; if the big parties need any encouragement to take it seriously they need only remember how Wilson lost power in 1970. When that campaign opened there was a pretty widespread assumption that the Labour Party was going to win and that the election was little more than a short break in Wilson’s administering the affairs of the British capitalist class. When they were defeated it was put down to a miscalculation in timing by Wilson, largely to do with some unfavourable trade figures which were published a few days before the poll.

The implication of this excuse was that, had those figures come out a couple of weeks later we might never had endured the Heath style of running capitalism. It enabled the politicians to ignore the possibility that Labour might have lost because of their record — their attacks on working class living standards, their support for the napalming Americans in Vietnam, their racist immigration laws, their whole dismal performance of fumbling through one crisis after another.

If this is remembered by Callaghan, he will be weighing up several factors, hoping that if Wilson did make a mistake he will not make it again. Some of the more recent by-election results may have given him some hope that, punch-drunk though they may be, Labour voters still have enough strength to bounce back off the ropes.

Then there are the official statistics, which regularly jerk out of the Treasury, the Department of Employment and so on, which are supposed to tell us how British capitalism is doing compared to its rivals. We have already mentioned the trading figures; there are others which tell how many of us are queueing up for dole money, how much we are paying in the shop for the necessities of life, how successful the government has been in its efforts to hold down our wages, by how much they have inflated the currency.

Workers are usually impressed by these figures, regarding them as something like the temperature chart at the end of a patient’s bed, except that the illness is in this case treated as if it were the patient’s own fault. But if Callaghan also thinks they are important, he is at once faced with a problem; he is dealing with the unpredictable.

No government is able to foretell the prosperity or the failure of its industries. They may guess and perhaps sometimes be right — which will allow them to claim special powers — but it all rests upon the market, which itself is anarchic and uncontrollable. Of course, when a government is able to publish figures which are seen as hopeful — falling unemployment or lower prices for example — Chancellors are quick to claim credit for them. It is only when the statistics tell a different story — when the jobless are increasing or prices spiraling — that governments take refuge in the excuse that they have been hit by the equivalent of a snowstorm in August.

But if the markets — which means the economy — of capitalism were controllable and could be predicted then most of capitalism’s problems would not exist. It would also mean that a lot of economic experts — perhaps even a Chancellor of the Exchequer or two — would be redundant, which many people might consider a small price to pay for such relief.

Meanwhile, as he is wrestling with the unpredictability of capitalism, the Prime Minister must also be keeping an eye on his calendar, aware that we are approaching the conference season. These events can sometimes be useful propaganda exercises to a party anxious to hide its record (although the miners’ conference, with its threat of a repeat of the 1973 confrontation with the Heath government was, at face value, anything but reassuring to the Labour government). There was a time when members of the Labour Party may have thought that their party conference mattered and that if they took policy decisions there they would be written into a Labour government’s programme.

There could be no other explanation for all the effort which went into those conferences, which voted for unilateral nuclear disarmament, or Clause Four, or for something equally unrealistic. But after the celebration of their victory in the vote, the delegates were confronted with the fact — by Attlee, Gaitskell, Wilson — that Labour governments run capitalism as it has to be run — in the interests of the ruling class — and that this would not be affected by woolly minded resolutions from over excited delegates. In the practical world of capitalist government promise is one thing; performance is another.

There have been many such examples of Labour conferences being an embarrassment to their leaders in the hunt for votes. Callaghan will be hoping that there will be no repetition this year (he is, after all, acting with considerable dispatch in the matter of Labour campaigning for the abolition of hunting, not on the grounds that he hates foxes but that such a proposal is likely to lose Labour votes in crucial seats) and that the party will be able to hold a rousing event glittering with promises for the future. He may gain inspiration from the performance of Harold Wilson, at his first conference as leader in 1963, when he dazzled the assembly with his talk about the good life waiting for us in the technological revolution. It quite made the conference forget Labour’s record in office, their electoral humiliations and their internal disputes.

The Tories need have no fear on this score since their conferences are, almost without exception, hearty affairs with one leader after another stepping up to enthuse the faithful and to pretend that the microdot differences between them and the Labour Party are worth getting passionate about. Rarely is the boat rocked; everyone is given an ovation because the Tories love to clap and cheer. It is almost as if, after a long muscle-wasting illness, they have been advised by their doctors to get a little exercise about the hands and forearms.

While Callaghan is musing on these factors, timing his effort like a jockey waiting for the right moment to run for the winning post, few people are likely to be asking why he is so concerned. The simple answer, that Labour is hoping to get some advantage in terms of votes if they get the timing right, does not go far enough. After all, if Labour government is so good for us, should there not be millions of grateful workers ready to vote for another dose of it, no matter when the election happens?

We might do well to approach this question from another angle. The importance attached to the timing of an election implies that the voters will change their minds over a very short period (in the case of 1970, the argument runs, over just a few days) in response to some event or piece of information. Now what sort of influence is needed, to bring such a change about? We have already seen that the trade figures are supposed to have that effect. Another might be a political event — Powell’s advice, in 1974, to vote Labour is one. Another was the sudden change in the Russian leadership in 1964, which came during the general elections here and which had Wilson worriedly claiming to know Kosygin well and to be able to talk to him man to man. What could be more appealing, to a working class concerned that their masters’ interests should be adequately represented in the conference chamber?

Which brings us to the crucial point. Accepting that votes are influenced by the timing of an election, what sort of vote is it which acts in that way? What level of consciousness does it suggest, behind the swinging vote? A worker who is impressed by a set of figures about capitalism’s trade, or by a change in the dictatorship in another capitalist power, sufficiently to change his vote is clearly not about to use that vote to its full power; he is not about to use it to overthrow capitalism. He is voting in ignorance of his class standing, his exploitation and of the essentially anarchic and inhuman operation of capitalist society.

In that political ignorance he is open to any persuasion. He will vote Labour because his dad always did, or Conservative because he has moved to a semi in the suburbs. He will experience, and grow angry and frustrated under, the pressures of capitalism and he may change from one capitalist party to another in desperation that each cannot possibly be worse than the other. A kitten chases its tail to better effect.

A voter who thinks like that may well be susceptible to the skills of timing, which are supposed to be part of the top politician’s essential equipment. If there are enough such voters it may be worth Callaghan’s while to fix polling day so that it might bring in a bigger vote for Labour. But what is the end of it all? Such an appeal is to the politically unconscious; it is a deception, an invitation to trust blindly in leadership when all the evidence is that this is futility. As long as this attitude holds sway, capitalism will continue with its problems, its degradations and its repressed and frustrated workers.

There is at present little attraction for the working class in the appeal to reach out for something better, for an understanding of capitalism and of what it does to us all, of the cynicism of its politics. When the political parties of capitalism set out to manipulate the voters—with promises, flattery or the strategy of timing — they are expressing a contempt for the workers which, sadly, may be somewhere near realistic. The working class should resent this and determine to act for themselves. And this resolution should get through to Callaghan and his like so that in their preoccupation with fixing a date when we are to vote they begin to hear a far disturbance, and know that the bell is beginning to toll for them and for all they represent.

Ivan

Diary of a Capitalist (1978)

The Diary of a Capitalist column from the August 1978 issue of the Socialist Standard

Sunday

I came to stay at Claridge’s recently, during the strike by some of its staff, to demonstrate my solidarity with the hotel’s owners. The rooms cost from £38.50 a night upwards (Times, 11.4.78 and 15.4.78), so it was not a cheap gesture. In contrast, a London waiter’s pay had just been increased to £30.27 for a forty-hour week. The take-home pay of a Claridge’s chambermaid on the picket line was, after various deductions, £23 a week. The strikers had come out for two things: recognition of their union, and the re-instatement of their shop steward, who had been sacked — victimized, according to the strikers.

As often happens in these affairs, the strikers went back empty-handed (Times, 25.4.78). The shop steward later accepted compensation from Claridge’s, but he stayed sacked, as the hotel had insisted he would. We capitalists get the best of both worlds. The hotel-workers, like the firemen, the Grunwick employees, and many more, were beaten into submission; and at the same time many workers remain entirely convinced (by the press and television) of the ungovernable power of the unions, which can therefore be blamed for the miseries of their lives.

Monday

It is absolutely essential for us that the working class do not discover what Socialism really is. In this we are much helped by the left-wing parties—the Labour Party, the Communist Party, the various Trotskyist groups—who allege that certain capitalist countries such as Britain, Russia, China, or others, are really Socialist, or could easily become so with a few more reforms. These allegations are naturally made much of by avowedly capitalist-supporting media-men. Peregrine Worsthorne had an article in the Sunday Telegraph (2.4.78) in which he commented sarcastically on James Callaghan’s stay at the British Embassy in Washington, being waited on by servants and taken round in chauffeur-driven cars. The article was called The Splendours of Socialism — in reality a completely irrelevant title, but an effective piece of propaganda — and the article went on with attacks on state capitalism (labelled “Socialism”), of which Russia and what he called the “Communist countries” were given as dreadful examples.

Worsthorne made another good propaganda point, alleging that Callaghan was living it up in a way that “no British capitalist, however successful, could hope to emulate” (who does he think stays at Claridge’s?) Thus the workers who read the paper are assured that the capitalists are not really very well off. Well done, Worsthorne!

Tuesday

With my business interests I need a pied-à-terre in town, and for the last couple of months I have been paying £500 a week rent for a furnished flat in central London—really luxurious ones bring up to £1000 a week (Times, 5.6.78 and Observer, 11.6.78). However, I have decided to get somewhere more permanent. I think 1 will go after a house in St. John’s Wood: it’s a nice size, with five bedrooms and two bathrooms, and is offered at £475,000 (Times, 9.6.78). At a modest price like that, not even half a million, of course it’s not freehold: the lease is fifty-seven years.

I’ve made a start on the furnishings. A pair of George III mahogany commodes was sold by Christie’s for £95,000 to a London dealer “on behalf of a private collector” Daily Telegraph, 16.5.78). They should look well in my new house.

Wednesday

A film starlet recently told a journalist (Sunday Express, 21.5.78) of a discovery she had made while filming The Greek Tycoon. They borrowed a luxury yacht, and she found that “there was a crew of twenty-seven to look after just eight guests. That’s all they can have on board; there are only four guest cabins. Now that’s ridiculous . .” All in all, “I realized for the first time that rich people do live lives quite different from the rest of us.”

Well, yes, my dear, we do. We have more money, you see. Some of us throw it away foolishly. Mrs. Kitty Milinaire, the Duchess of Bedford’s daughter-in-law (who was recently charged with taking away on approval from Cartiers’, the royal jewellers, a gem stone and a couple of rings worth £204,000 and not returning them, but was cleared of any blame after a court case) — Mrs. Milinaire admitted losing £3 million in five years by gambling (Daily Telegraph, 29.6.78).

Even she was slower than Sir Hugh Fraser, the millionaire industrialist, who confessed some time ago to losing one and a half million pounds on the roulette tables “in the last year or two” (Times, 8.12.76). That’s throwing away about £20,000 per week, taking the average week in, week out, for eighteen months. To get through that much he had to play several tables simultaneously, sometimes as many as five, and make his rounds continuously among them.

These, however, are exceptions. And even this money isn’t “lost”: it goes into the hands of other rich people, either fellow gamblers or casino owners.

Thursday

Poor results have been reported from one of the companies represented in my portfolio of shares. Dunbee, the toy manufacturers, didn’t do as well as expected in 1977, particularly in the last half of the year (Daily Telegraph, 16.5.78). As the joint managing director said, “Christmas didn’t happen last year". (The remark, incidentally, shows a refreshing candour as to what Christmas really amounts to in a commercial society, despite the annual dose of religious propaganda.)

The disappointing sales no doubt resulted from the fall in many people’s purchasing power owing to the failure of after-tax pay to keep pace with prices (City Comment, Daily Telegraph, 16.5.78). That is one of the many dilemmas of our society: we capitalists strain every nerve to keep our workers’ pay down, but at the same time we must bear in mind that they are our customers. It is these contradictions within capitalism which lead to struggles between political policies which take place in every capitalist country (that is, in every country in the world).

After reading the Dunbee report, I had to console myself by arranging a week’s salmon fishing—I took a week on a crack boat on the Tweed, one rod, £1000 a week (Times, 16.5.78).

Friday

My old friend Lord Lilford has triumphed in the Court of Appeal. Lord Lifford’s fourth wife, who is now married to her third husband, sued Lord Lilford (who is now married to his fifth wife) for extra provision for their two daughters. When the plaintiff and the defendant got married, Lord Lilford “made financial provision for her former husband and her two children by that marriage” (Sun, 13.5.78). When they were divorced, Lord Lilford gave his ex-wife at least £200,000 in money and properly and shares, and also handed over £30,000 for each girl’s education, plus £1812 a year each until they were eighteen. The girls’ mother thought that that was not enough, and sued the baron for another £25,000 for each girl. She won in the High Court, but Lord Lilford’s appeal has now been upheld. The former Lady Lilford said after the case: “I think he should feel very proud of himself over the trifling sum of £25,000 for each of the girls out of his untold millions.”

But it’s the principle of the thing that counts (or, as you might say, the principal—and the interest). £50,000 is neither here nor there to people like Lord Lilford and me, but you have to draw the line somewhere.

Saturday

Went shopping in the West End. Bought rather a nice little book about the various New Zealand Rugby touring teams, for my nephew, who is keen on the game. It cost £200 (Times, 12.4.78). I met my girl friend, and 1 bought her a straw hat for £68 (Times, 25.5.78), and a pair of silk pyjamas, £200 (Eastern Daily Press, 16.6.78).

Have just booked for a three-months’ cruise with the QE2 later this year. In April 900 passengers landed from a three-month Far Eastern cruise, for which they paid charges ranging from £5000 to £100,000 (and that’s apart from their spending money on the trip). They included 150 “well-heeled English gentlefolk” (Observer, 23.4.78).

Capitalism is run, naturally, for the benefit of the capitalists, but that fact must be concealed as far as possible. Thus, while some capitalists go on fantastically expensive holidays, their journalistic apologists like Worsthorne continue the task of persuading the rest of the population that no British capitalist could afford even a chauffeur- driven car.

If we members of the ruling class did not have such a vast propaganda organization working for us, how long, I wonder, would our system last?

Alwyn Edgar

News in Review: The Budget (1967)

The News in Review column from the May 1967 issue of the Socialist Standard

The Budget

Callaghan's 1967 Budget, for the man in the street whose fortune is supposed to be involved in it, was nothing more than a bore. Very few people seemed to be aware that April 11 was Budget Day; even fewer seemed to care.

The reason for the apathy was that nobody expected any great changes in taxation; the financial pundits had almost unanimously forecast what is called a standstill Budget, although there were the usual pleas for some sections of the population (somebody seems to have suddenly discovered that there are actually people living in dire poverty) and for some regions of the country (it seems suddenly to have become obvious in certain quarters that unemployment is not a thing of the past).

Callaghan, apparently, agreed with the experts. "Steady as she goes" was his epithet for the Budget and that was the most newsworthy thing about it. (Although one banker called it the Puppet On A String Budget)

Budget day is always the time for the airing of two delusions. The first is that a Chancellor of the Exchequer, by using Bank Rate or any of the other financial measures at his disposal, can exert an exact and sensitive control over the economy.

In truth, capitalism is quite uncontrollable—as many Chancellors have found to their cost. Callaghan was not the first Labour leader to apply nautical terms to a financial situation; last July Wilson, admitting that things were out of control, said that the economy had been "blown off course."

The second delusion is that changes in taxation have some significant effect on working class conditions. The most that any Budget can do to a worker is for a time to alter his take home pay, up or down, by a few shillings.

In the long run a worker gets paid what it takes to keep him. That is a fact of capitalism and, like its economic anarchy, is something which no Chancellor can change.

Our Boys in Aden

What are British troops doing in Aden, apart from putting the boot in and expressing a willingness to accept a massive punch-up?

The newspapers tell us they are keeping the peace, which avoids the question of why the peace is threatened.

Aden was annexed (a diplomat's word for stolen) by Britain in 1839, and used as a base to guard the trade route to India. (It is still the only fortified point between Egypt and Bombay).

When the British left India in 1948 it could have been the end of their interest in Aden, had it not been for the rich oil fields which had been discovered in the Middle East

Aden now stands guard on the Persian Gulf, where two-thirds of the oil resources of Western capitalism lie. Britain gets more than half its oil from the countries around the Persian Gulf and British oil companies own about one third of the Gulf's production.

It is to protect these interests that Our Boys in Aden are being killed—and are themselves doing a bit of killing. Sir William Luce, who was Governor of Aden 1959-60, made it clear in an article in the Daily Telegraph on April 12 last:

We did not undertake the “policing” of the Gulf for some vague, altruistic purpose; we went there, and have remained there, because it has suited us to do so.”

By “we” and “us” Sir William is really talking about the East India Company in the old days and the oil companies today. These are the interests which need working class bodies to protect them, interests which are threatened today by claims from Persia, Iraq and Saudi Arabia and by the opposing Aden nationalists.

British capitalism’s only hope is to stay in Aden until some sort of order has been imposed in this conflict. A withdrawal now could well plunge the place into a Congo-like war, with serious results for the oilmen of the Persian Gulf.

So it looks as if Our Boys in Aden will have to carry on keeping the peace for a while, even if they have to kill half the population to do it

The Bristol Affair

Bristol Siddeley Motors’ excess profits on aero-engine overhaul—they had to pay back the government £3.9m.—is but one example of what goes on in capitalism. Recent years have also seen the Ferranti affair and the collapse of various insurance companies. But what effect do such commercial malpractices have on the working class as a whole? Well-meaning political reformers see this as a moral issue in which the community is harmed by loop-holes in the law and by administrative shortcomings which a minority exploit to line their pockets. The fog of moral indignation raised serves to obscure some very important points as far as the profit-making of capitalism is concerned. In the long run profits are not made by charging excessive prices or by milking the funds of companies. These are exceptional cases and fail to explain the source of the profit gained by the bulk of industrial and commercial enterprises. To find the answer production itself must be examined.

The people who do the work of producing and distributing goods and services do so for a wage or salary. However many sources of cheating are blocked off, and however much money is recovered by the government, wages will not be affected. These are normally raised by workers organising in unions to press for more. Employers, of course, are organised to resist these demands and to press their own for greater productivity or pay cuts as conditions demand.

Workers’ pay is part of the capital invested in production and is not their share of the product (which belongs in whole to the employer). Wages amount on the average to the sum of the things required to maintain workers and their families as healthy and efficient workers. As a class workers produce more than is needed to keep them and it is from this surplus that the employing class get their incomes. This comes to them in various forms such as rent, interest and profit and also provides the source of the funds which are needed by the government to finance their collective requirements such as armaments and the education, health and welfare of their workers.

So when arms contractors make more than the accepted rate of profit, it is a hindrance to the whole of the capitalist class in any country. The Bristol affair is but one of the sectional quarrels of capitalism in which all are striving for the maximum advantage. The government may be quite competent to deal with Bristol Siddeley but cannot hope to touch the greater question of the exploitation of the working class which is the norm of capitalism, with or without the swindles.

Finance and Industry: Even more Superfluous (1967)

The Finance and Industry column from the May 1967 issue of the Socialist Standard

Even more Superfluous 

A common defence of capitalism is that now-a-days millions of people are investors, directly or indirectly, in industry. Pension funds, insurance policies and unit trusts are cited as examples. The suggestion is that wealth is more evenly distributed. Harold Wincott, in the Financial Times of 7 March, in discussing a survey on how big business gets its hands on our savings, puts it this way: 

And, finally, a word on the alleged enormous discrepancies of wealth in this country we are always being told about How does one reconcile the recurring calculations that x (a tiny) per cent of the population owns y (a vast) per cent of our wealth with Dr. Richebacher’s figures of the massive and continuing movement away from private hands into the hands of institutions which hold them in trust for the people?

If Wincott thinks that the calculations showing “enormous discrepancies of wealth” are wrong it’s up to him to show where. In fact these calculations do take into account pension schemes, insurance policies and unit trusts. Wincott asked a question and got his answer from a correspondent who made the simple point:

The short answer may be to ask why one should attempt it. Surely the types of assets owned can vary without affecting x and y.

In fact the whole argument bears all the marks of a public relations trick to gain popular support for Big Business and the Stock Exchange against any measures they feel might harm their interests.

A study by the London Stock Exchange, How Does Britain Save?, was published last May. It shows 33.5 million out of the 36 million adults in Britain save in one way or another. These savings are broken down:

The two-and-a-half million share owners (only 7 per cent of the adult population) are further broken down (some have more than one type):

There has been a shift from individual to institutional investors on the stock exchanges though not all these institutions hold shares “in trust for the people.’’ The insurance companies and banks are profit-making bodies whose own shares are traded on the stock exchange. In any event, the wealth of institutions can be traced back to individuals in the end and this is done to get estimates of the concentration of the ownership of wealth.

It is difficult to see how the growth of institutional investors is a justification of capitalism. In fact it makes the basic absurdity of capitalism—social production yet sectional ownership—even more obvious. When the joint-stock company appeared a hundred or so years ago, Marx wrote that in separating management from ownership it meant that “the capitalist disappears as superflous from the productive process." Engels was less polite. He spoke of “parasites”.

Now the last in the long list of social functions the capitalists imagined they had has gone: as individuals they can no longer claim to be the main source of finance for industry. Even this function, only necessary under capitalism, is now carried out by anonymous institutions. The individual capitalist — one-time alleged abstainer, organiser and risk-taker —is shown to be superfluous even in the realm of finance.

The savings of wage and salary workers, such as they are, are mainly funds to use when not employed. Having a few hundred or even a few thousand pounds worth of savings doesn’t turn anybody into a capitalist. Even the slaves in Ancient Rome had a fund called a peculium, collected from tips, which they could use to buy their freedom when old. A capitalist is someone who has enough wealth to live without having to sell his mental and physical energies.

Accepting that shareowners are now

functionless, Labour theorists argue that ordinary shares should be abolished and all investors receive just a fixed rate of return. Callaghan, the present Chancellor, told the 1952 Party Conference:

Instead of making the Ordinary shareholders residuary legatees of all profits that are made, let us make the workers the residuary legatees. Let the shareholders be content with a fixed dividend. Let us abolish Ordinary shares.

The government has brought in a new Companies Bill but, needless to say, even Callaghan’s suggestion is now too radical. Not that converting equities into fixed interest stocks will end the exploitation of man by man or abolish the right of property-owners to a property income.

The real solution should be obvious: convert the already socially-operated means of wealth-production into the property of the whole community. Then production can be organised for use without the restrictions of profit-making, finance and commerce.

Adam Buick

Finance and Industry: A tax on wealth (1963)

The Finance and Industry Column from the April 1963 issue of the Socialist Standard

POLITICS

A tax on wealth

Time was when the Labour Party paid lip-service at least to the idea of dispossessing the capitalist class of its wealth. Only a few years ago they were pushing the panacea of nationalisation, that travesty of Socialism, though they were prepared even to dilute this by liberal helpings of compensation.

Now, nationalisation, even of this milk-and-water variety, has become a dirty word. The latest idea is a wealth tax—nothing too sweeping, you understand, an annual levy on say all wealth over £20,000 to bring in perhaps £200 million in extra taxation.

Mr. Callaghan, Labour’s shadow Chancellor of the Exchequer, was deputed to fly the kite. But he was careful not to go too far nor to frighten anybody. ". . . only one person in every 100 would be affected,” he said, pointing out that such taxes on wealth already operated in many countries, including Sweden, West Germany, Belgium, Norway, Holland, India, and Denmark—nothing at all ‘‘revolutionary ” about the idea in fact.

Of course, the idea is not revolutionary. But since when has anybody thought that anything emanating from the Labour Party has the remotest connection with revolution? And, even on the Labour Party's own shallow terms, what feeling can anyone now have, other than contempt, for its latest line?

INCOMES

Who earns what?

If only for the record, the latest income figures from the Inland Revenue deserve mention.

Last year, they report, the number of people earning more than £100,000 a year jumped from 63 to 81. There were similar increases in all the top income brackets. Here is the full table (number the previous year in brackets):

Contrast this with the bottom end of the scale where 1.3 million earned about £500 a year; 2.6 million, £600; and 2.2 million, £700. In addition, another 2.1 million earned hardly enough to pay income tax at all.

There are still people who believe in the myth that incomes are being equalised. These figures should shake them, for they show not the slightest evidence of a trend towards equality.

Of course, some will agree that the details relate to figures before tax and that it is only after this has been deducted that the comparison should be made. Agreed, the gap becomes narrower when this is done. But our “equalitarians” must really be simple people if they think this shows the true picture. Even as regards income, there are still many ways —and not illegal ones, either—of evading the tax net. “Expenses on the firm ” is only the most well-known device for doing this, there are others.

But let us come down to fundamentals. Income is any case dependent on wealth—it is ownership of wealth that really matters and all the wishful thinking in the world cannot wish away the fundamental fact that the pattern of wealth ownership has remained virtually unchanged. Roughly 10 per cent. of the population still owns roughly 90 per cent. of the country’s wealth.

And that is the fact that matters.

BUSINESS

Mergers and takeovers

There have been fairly frequent comments in these columns recently about the growing trend towards concentration in industry. Hardly a day goes by without an announcement somewhere of a merger or takeover. Sometimes the takeovers involve really big business, as with the abortive attempt by I.C.I. on Courtaulds; more often it is the big concerns swallowing up the medium and small fry, or the medium ones taking over their lesser brethren. Mergers tend to take place between equals, to avoid competition between themselves or to make themselves strong enough to resist bigger rivals.

All this is well-known. But just how far has the development gone? Exactly how much concentration is there in modern British industry?

The Conservative Bow Group has recently mads an effort to answer these questions in a pamphlet called Monopolies and Mergers. Taking the three biggest firms in each industry, they have calculated what proportion they account for of the total output. Some of the results can only be taken as broad guides, but here are their findings:

There are really no surprises in the list —artificial fibres, oil refining, tobacco, sugar, dyestuffs, margarine and soap, are all well-known as being mainly in the hands of a few prominent firms.

We should add that the figures relate to 1958 and some of the percentages may actually have risen since then as the result of further takeovers or mergers.

INDUSTRY

Stranger still

In last month’s Standard we mentioned that the French subsidiary of the U.S. Remington office machinery firm had recently been closed down and production transferred to the factory in Holland. This was followed, a few days later, by the closing of the typewriter side of the company in Glasgow and its transfer, again, to Holland. Altogether, a nice example of the international workings of present-day capitalism.

We also discussed in the same issue the surprise and secret takeover by U.S. Chrysler of the French car firm, Simca; adding that 25 per cent. of the shares in the Simca concern were actually owned by one of its competitors, Italian Fiat.

The latest development in the story is the news that the former Remington factory in France may soon be taken over by, guess who? Yes, you’re right. Fiat.

What Fiat intend to do with it if they buy it has not yet been disclosed. But whether it has to do with cars, or typewriters, or something quite different, we can be sure of one thing—there is the prospect of profit in it somewhere.

All we need to really complete the story, of course, would be able to say next month that the former Remington factory in Glasgow had also been taken over in its turn—by Simca.

Who knows? Capitalism is fast becoming nonsensical enough for anything.

Stan Hampson

Diary of a Capitalist (1979)

The Diary of a Capitalist column from the March 1979 issue of the Socialist Standard

Sunday

Lord and Lady Brownlow were telling me the other day of their family financial arrangements. Their four-year-old son, Peregrine, has just inherited £3 million. As they said, he will remain “a very normal little boy”.

Someone must have eavesdropped, because now the Daily Express columnist Jean Rook (29.11.78) has seized the chance to make a cheap sneer. How can any four-year-old with £3 million be “normal”, she says. She has missed the point entirely. He is a very normal little boy by capitalist standards. What’s so special about three millionnn? Nobody said anything about him being normal from a working-class point of view.

Journalists pretend to forget that the two classes in our society are completely different. What is normal for us in the capitalist class is not, of course, normal for the rest of the population. For example, you wouldn’t find a capitalist making a cheap sneer. An expensive one, possibly.

Monday

At the club this morning we all agreed what a splendid letter dear old John Wakeham, the Conservative MP, wrote to the Daily Telegraph the other day (15.11.78). He said, in a fine peroration. “Conservatives put their country first, their party second and themselves last.” Absolutely true, we told each other, if by Conservatives you mean the upper-class people who really run the party. Some of us at the club were Labour supporters, and we all accepted it was true of Labourites and Tories alike among the ruling class How different from the workers! Someone made an impromptu speech attacking these greedy union- members, always selfishly trying to grab more devalued money—the “Gadarene rush” as one industrialist called it recently. We all enjoyed the implication that these people perpetually worried about their wages and salaries are simply swine. We had a few rounds of drinks to toast our own self-sacrifice, and the noble unselfishness of all the moneyed people like us. heroically putting their country first and themselves last. We all tried not laugh.

Tuesday

Had a few people to dinner myself this evening. Among the trimmings were half a dozen edible dormice at £39 each (from a farmer near Stockport, Sunday People, 24.12.78). a few jars of caviar at £104 a pound (Observer, 24.12.78) and a small bottle of Hungarian Tokay wine probably dating from the 1680s. which I got recently at Sotheby's for £1300 (Daily Telegraph, 14.12.78). There isn’t much eating or drinking in any of them, but it’s these little things that show your guests you have made an effort.

Wednesday

The poor old Shah of Persia! So the Iranian capitalist class has decided to ditch him. 1 warned him last winter what might happen. I was staying on Kish Island, in the Persian Gulf, where (as the Daily Telegraph put it, 11.11.78) "a complex of villas, casinos, and a luxury hotel has been built and where bevies of imported French girls act as 'maids’. Further lavish development is planned.” It is only for the upper class —"the very rich of the Gulf area, influential Persians, and the aristocracy.” Others need not apply. "Strict security screening makes certain that only the favoured are allowed into the exclusive holiday club with its £800 membership fee. a compulsory £8000 credit card and villas at rentals running into thousands." The idea is an obvious money-spinner, given the number of people around with pots of money to spend on enjoying themselves, and the Pahlavi Foundation, the Shah’s family trust, apparently provided most of the finance for setting up this paradise of extravagant pleasure for the well-heeled (Observer, 7.1.79). "The Shah and his family have spent several winter holidays at a Royal residence on the island but not at the club where the French 'maids’ sunbathe topless" (Daily Telegraph, 11.11.78).

When I stayed there I had several talks with the King of Kings, as he is (or was) known to his friends. I told him that despotism, with its censorship, its vast armed forces, and its secret police (such as the Shah’s Savak), and all the expense of jails for political prisoners, was very expensive. In Britain, I said, the ruling class was firmly in power. and our system was much cheaper. I tried to persuade him to allow freedom of speech, political association, and so on. I pointed out that under our system only the very rich could run mass newspapers and magazines, or own TV and radio companies; and with the state radio and TV also pouring out pro-capitalist propaganda continuously, the people of Britain have so far been persuaded into almost total support of capitalism. The political parties that come to the top in our system (I said) all advocate various models of capitalism, whether mainly private enterprise, mainly State-controlled, or something between the two. So capitalism is safe whichever party is in power; no expenditure is usually necessary on secret police, military tribunals, expensive political jails, or a censorship apparatus; and you can boast of your democratic freedoms, which is very useful in drumming up support for the State, both in peacetime and (even more) in wartime.

The Shah, however, said it wouldn’t work at present in Iran. Practically everyone in Britain can read, and so is subject to written propaganda: not so, yet, in Iran. Nor are TV sets as common there as here. When universal education and hire purchase have put this right, said the Shah, he would think about it.

And now it’s too late! Perhaps I'll drop a line to the Ayatollah Khomeini, the new "strong man", giving him due warning. Despotism seems more stable than democracy; really, the opposite is true.

Thursday

Have made an agreement for the first day of the shooting next season. I’ve got some nice pheasant and partridge moors for £3500 for an eight-gun syndicate, including myself. Last year the first-day bag of these moors was 700 birds. It’s getting a bit on the expensive side—in lots of places a couple of good days after the pheasants will cost you well over £500 per gun (Daily Telegraph, 11.12.78). Last season I got up a little party and we took a 10,000-acre estate pheasants and partridges for £20,000.

I like imagining I'm knocking over some of these damned strikers or picketers when I’m after the game. Each pheasant I kill, I say to myself—that’s another of these idle trouble-makers accounted for! Shooting’s too good for some of them.

Friday

A lot of unnecessary fuss in Denmark. The Danish Minister of Education. Mrs. Ritt Bjerregard. went to Paris for a Unesco conference, and her expenses for a thirteen-day stay were £5,700 (Daily Telegraph, 23.12.78). The Danish PM told her to pay part herself, and when she refused, sacked her.

A storm in a teacup. £5700 is nothing out of the ordinary—I've spent much more than that in two weeks in Paris! If this Mrs. Bjerregard is a member of the capitalist class, she could easily pay it herself; if not. she shouldn't have enjoyed herself on that scale.

The truth is. the Minister seems to have been enjoying herself as if she were rich, when she wasn’t.

Saturday

Though democracy has many advantages for the ruling class in advanced Western societies, it is not without its drawbacks. Sometimes I wonder if the rival political parties don’t go too far in their battles to secure the fruits of office. There’s no denying that some awkward facts do leak out occasionally.

Mr. Callaghan and most of his ministers have committed themselves to the thesis that the working class causes inflation through pay-increases, which is their defence when they are criticized over the continuing rise in prices. Of course we in the ruling class know that this claim is nonsensical, but it is good propaganda and makes for exciting newspaper stories against the greedy proles. But in their haste to discredit Callaghan's lot and grab place and power for themselves, some Tories have been prepared to show up Callaghan's naive errors, even at the expense of abandoning a first class anti-worker argument. The Daily Telegraph published a middle-page article recently (15.11.78) in which the author pointed out that rising wages cannot push up the price of goods unless the Government validates increased prices by printing more money . . . That this is clearly true is suggested by the fact that many firms have been unable to recoup rising labour costs by increased prices: for if prices could always be raised by as much as costs rose, no firm need ever lose money.” A week later (22.11.78) another middle-page article recalled the real reason why Governments of all kinds have continuously and deliberately inflated the currency for the last forty years: "Keynes persuaded a whole generation that by expanding the money supply and generating mild inflation, thereby reducing real wages, it would be possible to circumvent union opposition to necessary wage-reductions.”

Now we all know that these are the facts of the case. The Telegraph writers have exposed Callaghan—either he has been deliberately doing one thing and saying another (whatever you call that kind of behaviour), or he is painfully ignorant of elementary economics. But supposing the workers get to know of this? Most trade union leaders who appear on the TV hasten to register their agreement with Callaghan’s claptrap. self-evidently fallacious though it is, and grovellingly apologize for their members who have gone on strike hoping to regain the standard of living they thought they had agreed to work for a year ago, is it wise to abandon such a splendid weapon, which the newspapers continually use to pillory the workers?

When Mrs. Thatcher gets to Number Ten she may probably want to use the same argument, blaming the unions for the inevitable results of the state’s Keynesian economics: I hope she won’t find the ground has been cut from under her feet.

Alwyn Edgar