The Fat of the Land (1975)

From the January 1975 issue of the Socialist Standard

Even a newspaper like The Sun should be asked to explain itself at times. On 22nd November its editorial said: “Britain’s future is bleak, sombre and perilous . . . the British are fat, lazy, complacent — and deeply in debt”.

Who are “Britain” and “the British” in this statement? Clearly, The Sun does not mean everyone. Harold Wilson and Edward Heath are both fat, but they are not deeply in debt with bleak futures. Denis Healey is fat. So is Reginald Maudling. The Houses of Parliament are full of fat people, and they are only outweighed by the Institute of Directors. Nobody supposes, however, that these are the target of The Sun's unkind words and its sombre warning.

What it means is the working class, and it’s a funny thing how the idea of a working man being fat is equated with national disaster. In the late nineteen-fifties a report that 5 per cent, of working-class children were obese was greeted in much the same way as Noah received the forecast of rain. The proper, acceptable proletarian physique is thin as a whippet, with only muscular development in the working parts. Anything above that is degeneracy, and doom to the rate of surplus-value. Haven't you ever wondered why they put weighing-machines in public places everywhere ?

The Sun was in fact commenting on, and supporting, a report on “Britain’s plight” by the Hudson Institute of America: experts say poverty is on the way. On the same page, pronouncements to the same effect by James Callaghan, the Labour Foreign Secretary, were reported :

Britain is teetering on the edge of a plunge into poverty . . . Mr. Callaghan said: “I hope we are touching bottom. I hope we don’t go further down—but the indications are not good.”

On 5th December similar forecasts and warnings were given in a review by the National Institute of Economic and Social Research. According to this, in 1975 prices will rise still higher and unemployment will grow. Both teams of “experts” had plans to urge. The National Institute thought import controls would prove necessary; the Hudson Institute would remedy things by “a new national six-year economic policy” run by “Britain’s best economists and administrators”.

The latter scheme is presumably to ensure that, whatever happens, the fat and the thin remain distinguishable. How little use it would be otherwise is shown by one of The Sun's remarks:

Leadership—or lack of it—is one element, of course. We are all of us unfortunate to live in an age of political pygmies.
But perhaps we are already beyond the stage where we could be rescued by inspired leadership.

Which is saying that things have come to a crisis under unimpressive dolts, but would be no better under geniuses.

The fallacy of all this is treating the impending crisis as an abnormality. Words like “doomsday”, “peril”, “saving Britain” and “the Dunkirk spirit” imply it to be a millennial catastrophe; but that is only a way of calling for more sacrifices from the workers. The reality is that the crisis is a normal phenomenon of capitalism.

It has nothing specially to do with Britain, with policies adopted by governments in this country or the attitudes of trade unions. It is in fact world-wide. Other countries have trade crises and large-scale unemployment (how does the Hudson Institute, which attributed Britain’s problems to the “lazy, complacent” population, explain the depression in America ?).

What is most normal of all is working-class poverty. Callaghan’s talk of a “plunge” into poverty is, for the majority of the population, like warning someone standing on a cigarette paper that he’ll fall. What kind of “plunge” for the homeless? or the pensioners, the unemployed, the low'-paid who cannot afford to buy newspapers? It recalls the Liberal speaker in The Ragged Trousered Philanthropists frightening his hearers — “men wearing broken boots” and “toil-worn women” — about the “Black Ruin” of Socialism, and the author’s comment:

It never occurred to any of these poor people that they were in a condition of Ruin, Black Ruin already.

Because of the perennial cry that “we” must wake up and (vide The Sun) “fight to make it all right”, it is useful to bear in mind that British industry was highly prosperous when that episode was written.

The 1975 outlook for the working class is bleak and sombre; not for the reasons given by the “experts” (whose predictions are only guesses), but as the perpetual situation under capitalism. It is worth pointing out that in the post-war years Socialists have been told repeatedly that capitalism has changed or is under control, and a major slump could not happen again. Will you believe us now, please ?

One other statement made by The Sun needs explaining. It said:

For too long we have deluded ourselves into thinking that "redistribution” of wealth—i.e. soaking the rich— was the answer to our problems.

The “delusion” has been spread by the reformists of the Labour Party, which The Sun supports. The “plain fact” that insufficient wealth is produced is the consequence of capitalism, which Labour and The Sun support. Socialists have for over seventy years exposed these phoney remedies and pointed to the only solution to the problems.

The plain fact is that there simply isn’t enough wealth to redistribute.

Robert Barltrop

Our cover illustration is of the successful Socialist Party meeting held in Trafalgar Square in September. With acknowledgements Suomen Kuvalehti, Helsinki.

A New Year Message (1975)

From the January 1975 issue of the Socialist Standard

I had thought of writing up Mrs. Margaret Thatcher and her hoard of processed peas and baked beans. But does she warrant room in our journal for what after all is only a “shadow”? Anyway, by the time this is in print it will be 1975. A New Year and the beginning of the fourth quarter of the twentieth Century.

Doubtless Old Moore’s Almanac will map out the year ahead. “Trouble for a Royal Family; the death of a prominent Statesman; floods; dissent in the Labour and Tory Parties.” Events that repeat themselves year after year, and apart from the first and the last, there’s not much you can do about it.

We can prophesy that despite the claims of Wilson’s government to be building a “Socialist society”, Capitalism will continue through 1975, and for ever and a day, unless you are prepared to do something about it.

It is a constant source of amazement to us that you are content to put up with a world of stark contradictions. Don’t you think it just a trifle odd (to put it mildly and not rouse your hackles) that you spend your life either working or worrying about a job, and then at the end of it all, you’ve nothing to show? Don’t you think it a little crazy (mutterings: “these Socialists are a funny lot”) that everything carried on in this world of capitalism is first of all subjected to a financial yardstick? Don’t you think it just bloody stupid (“I know these Socialists are prejudiced”) that people should starve in the midst of potential abundance?

Socialists claim that capitalism has gone on for far too long. And only because you are willing to support it, and help it along. You read the papers; listen to the radio and watch the box like us. Frankly, what is your reaction when you listen to all that old chat about recessions, inflation, deflation, Common Market etc? Don’t you feel like putting your foot through the screen and saying to “hell with it all”? This at least would be a, healthy, if expensive reaction, but it doesn’t go far enough.

We want a different type of world — a new way of life. We think this earth and its riches should be at the disposal of the whole of mankind. That it should be used to meet our needs and not wasted on a market economy. A way of life based upon co-operation for the common good.

But we can’t get it without your assistance. After all, you will be running the world of Socialism, so you’ve got to know something about it and what is involved. You’ll need to take an intelligent and active interest in politics before you take the eventual plunge to strip the capitalists of their ownership and herald a new society.

In short, it’s well past time that you cast aside your political blinkers and joined up with the SPGB in the only worth-while task. We can promise you hard work; a fulfilment not to be equalled, and the comradeship of a group of men and women who put principles before expediency.

During the next week or two, many people will wish you a Happy and Prosperous New Year. They do it out of habit. They and you know that 1975 will be much like 1974 — if anything more harrowing. We can do nothing about your prosperity but we can offer you a Happy New Year in the ranks of the SPGB helping to make known the Socialist idea.

Of Mrs. Thatcher, I feel she has possibly lost her chance of leadership of the Tories for a mass of tinned foods. But then, she’s only a grocer’s daughter in a pretty hat.

Cyril May

In The Year ?? (1975)

From the January 1975 issue of the Socialist Standard

The old man said, if he knew then
What he now had known
Sooner, would he have helped the seeds of socialism to be grown
He regretted being foggy minded
Being ignorant, being blinded
All that he’d been told about man's nature, about mans greed
Now he knew, it was only man’s behaviour indeed
It was only capitalism that had stopped him thinking
Stopped him reasoning, stopped him becoming a human being 

We listened in awe to his stories
None of them were fiction !
Of days when the world was full of contradiction
Of love and destruction
Of society and loneliness
Of plenty and destitution
He told of the few that advocated socialism
And their task of breaking out of a prism
That held ignorance, fear and superstition
A fuller, better life they said could be
Now it’s fact ! it’s true !
And we can vouch for that
Us children sitting on this comfortable mat
Our heads are not filled with crazy notions No forces at work to sway our emotions
Intelligence and co-operation is what we use
We come and go, we are free, you see ! 

I ask you now, who will you be
The old man ? though happy now but full of regret
Much sooner, his freedom was his to get
Or us children with lots of life ahead
No chains of slavery, all work and bed.

David Wright

50 Years Ago: Wise Martians? (1975)

The 50 Years Ago column from the January 1975 issue of the Socialist Standard

Some few months back our astronomers directed their telescopes upon our beautiful celestial neighbour — the planet Mars. Several claimed to have discovered overwhelming proof of the existence thereon of sentient beings. Their difficulties were recognised even at a distance of hundreds of millions of miles, and they had overcome them in a highly ingenious way . . .

★

But one significant thing seemed to escape the reflections of our astronomers. All their observations implied that the Martians viewed their planet as a coherent whole, a common possession. None was guilty of the lunacy of suggesting that the Martians were divided into separate jealous, warring gangs, each gang sub-divided into toilers and parasites. It is not impossible, of course, but all our scientists’ suggestions tacitly recognised that works of such magnitude, directed to a common end, would naturally be the work of beings who had risen superior to the stupid divisions with which we are familiar. Then let us take a celestial leaf from their (possibly non-existent) book, and view our earth as a common heritage. Let all take part in the winning of wealth from Mother Nature’s storehouse. Then let all share in the result of a co-operative mutual effort. Let us banish slavery, poverty, ignorance and wretchedness to the limbo of forgotten things. You have nothing to lose but your chains: you have a world to win.

(From an article A Happy New Year by W. T. Hopley. Socialist Standard, January 1925.)

Letters: The Middle Class (1975)

Letters to the Editors from the January 1975 issue of the Socialist Standard

The Middle Class

Although when the SPGB refers to the working class it means all people who receive a wage or salary in return for their labour-power, most people still think in terms of the “working class” to mean industrial blue-collar workers and the “middle class” to mean white-collar workers.

These two “classes” appear to represent two different outlooks on life or two different ideologies, e.g. attitudes towards thrift, private education, health and morality. These different attitudes appear to be represented by the Labour and Conservative Parties and appear to be incompatible. As capitalism’s problems become more intense the confrontation between the two sets of ideas and therefore the two “classes” will also become more intense. This is what most people think of when they hear the term the class struggle or class war.

What is the SPGB attitude to the above and how does it argue to convince the two “classes” that they share the same enemy? Since I assume you believe that Socialism can only come about when the majority of both “classes” and not just one understand and want it.

David Bird

Burton-on-Trent

Reply:

Though, as you say, large numbers of people believe there is a “middle class” and they are in it, it has never been defined successfully. It is not necessarily white-collar occupations: income, education and an assortment of traditions add to the confusion.

We do not agree that “middle class” equals Tory and manual-worker equals Labour. Certainly some industrial areas, such as South Wales and Lancashire, have strong pro-Labour majorities and some allegedly “select” areas nearly always elect Conservatives. But the opposite is also true. Some of the most dependably Conservative areas are rural districts with a lot of poverty-stricken farm workers, while “quality” papers for the “middle class” frequently favour Labour (e.g. the New Statesman, and see “The Observer Guide to Voters” in our last issue).

You ask how we can convince them that they are all one working class. We go on expounding the working-class position, of course—but capitalism is unable to avoid making the exposure, in any case. There are large sections such as teachers and civil servants who not many years ago would have thought trade-unionism and strikes beneath them. Eventually they have had to act as, and line up with, engineers, building workmen and the rest; and begun to discover that they are not different after all. Editors.

China

While offering my congratulations for the extremely interesting special issue of the Standard on China, I’d like to make a few points to supplement what is said in some of the articles.

To deal with the first article first. I believe the present Chinese view is that the “socialist revolution” began straight away in 1949; I think the Chinese have changed their minds on this matter, since they used to claim, as the article states, that only in the mid-fifties did the changeover to “socialism” begin. To be pedantic for a moment, concerning the name of the Chinese party: the Chinese language only permits a word order equivalent to the “Chinese Communist Party”, but not “Communist Party of China”. This article gives a very useful account of Party control mechanisms, but I feel that it would also have been pertinent to give an analysis of who the “privileged” are: it’s not sufficient to equate them simply with “the Party”, since many lower-level Party members are just dogsbodies.

I’d agree with the article on Chinese history that far more research is needed before drawing conclusions. In the meantime, here are a couple of considerations: firstly, I think there’s plenty of evidence to show that in Imperial China it was not the state that built or managed public works (including irrigation works); rather it was the “local élite” or “gentry” (call them what you will) who stepped into the power vacuum that existed between the all-but powerless village headmen and the local magistrate. It’s easy to overlook how small the local bureaucracy was in comparison to China’s size; each magistrate had to administer such a large area that he couldn’t possibly be responsible for much of what went on in it. Secondly, it’s just not true that “manufacture and trade belonged to only three or four well-populated areas”, unless the qualification “large-scale” be added. Probably every village had its own market town within walking distance, where the peasants would go to transact business with itinerant tradesmen. It’s been suggested that marketing systems played a a vital rôle in China’s rural social structure, and that to a large extent the marketing area defined the peasant’s social horizon.

Paul Bennett,

London E.2.

Reply:

Concerning the name of the CCP, we think you miss the point. It is not the possibilities of Chinese syntax, but the reason why whatever it is is universally translated into other languages as Chinese Communist Party instead of Communist Party of China. Editors.

The Thoughts of two M. A.s (1975)

From the January 1975 issue of the Socialist Standard

For anyone who wants to see anti-working-class propaganda at its crudest, we recommend the press statement issued on 9th December by the “National Campaign for Discipline in Schools”; providing it is held at arm’s length with a clothes-peg over the nose.

The signatories, and apparently the Campaign’s only members at that date, are “Revd. Valentine Fletcher, M.A. (Oxon)” and “Fred Naylor, M.A., M.Sc. (Cantab)”. They begin by referring to violence, vandalism and bullying in schools and profess to want “to help individual parents and to rally support for heads of schools and their staffs”; but their real motives emerge after that. They are concerned with

  The perilous state in which the nation finds itself, and a realisation that the problems in our schools are those of society as a whole.

They name three causes of the “perilous state”: progressive education, sentimental egalitarianism, and Marxism. The last is written-about incomprehensibly but with repeated allusions to a conspiracy to destroy. “Sentimental egalitarianism” means rejecting the “natural inequalities among individuals”, and deeming “all opinions and all values . . . of equal worth” as against “a hierarchy of values—than which there is no greater anathema for the egalitarian”. And they end:

  The problem of authority in the schools is clearly related to that of authority in other areas of society, especially in industry and within the trade unions.

What there is nothing about, in some 2,500 words purporting to deal with schools, is education. Nor is there anything to explain what the authors have in mind as “discipline”. If they argued that daily whackings produce better arithmetic, their intentions would at least be clearly stated.

But their Campaign is not of that nature at all. Though the weak ploy is to enlist people’s concern about bear-gardens in schools, they are appealing to others like themselves who would like to see “equalitarianism” and dissent squashed and blind obedience enforced—in society as a whole.

  The Campaign believes that all who stand for law and order, and the progressive betterment of society by democratic means should join it in restoring sanity to education and halting the rapid movement towards the breakdown of society.

Translated from the oily, equivocal language of university theses (“custodianship of a transmissible set of moral values”) that means: Put the lower orders in their place. In due course, the lower orders will have news for Messrs. Fletcher and Naylor. In the meantime, anyone who sees or hears of this document can perform a useful service by exposing what it is all about.

Robert Barltrop

So They Say: Social Con-trick ? (1975)

The So They Say column from the January 1975 issue of the Socialist Standard

Social Con-trick?

The "Economist” of 23rd November 1974 referred to the Social Compact (or Contract) as being

  so vague that there is no certain way of knowing when it is busted.

Although we can appreciate that the agreement between the TUC and the Labour Party has tended to be described by both parties in terms of what it is not, rather than what it is, if only the sceptical Economist writer had waited until Harold Wilson addressed the Labour Party Conference on 28th November, he would have learned exactly what it comprised:

  It is not a scramble in which the big battalions, the powerful and wealthy on both sides of industry or in finance, or in any sector of the community, can exercise their power in order to gain an unfair advantage.

Mr. Wilson went on to say

  The Social Contract means a fair division of our material resources, the fair sharing of sacrifices.

Now that’s clear enough surely? Mr. Wilson will no doubt be watching keenly from the wings as Len Murray takes to the stage and explains in terms of wages and unemployment levels exactly what the word "fair” means to the workers.

Upper Class extinct ?

It is reported by the astute Sir Frederick Catherwood, chairman of the British Institute of Management (Financial Times 27th November 1974) that there have been no recent sightings of that predatory species, the ruling class. He goes so far to say that

There is no longer such a thing as the upper class.

Although he does not give a precise date for the demise of this ancient order, his conclusions must spread despondency, not least among the BIM. But before they all go home, Sir Frederick may take some comfort from the "Saleroom” report immediately adjoining his own statements in the same newspaper.

 At Sothebys’ sale yesterday of the collection of the English gold coins 1700-1900 formed by Capt. K. J. Douglas-Morris RN, a record £539,390 was realised for a coin sale in London.
  Spink bought a Queen Anne five guinea piece of Vigo type dated 1703, for £26,000 a new auction record for any English coin, a George III pattern £5 piece of 1820 for £21,000, a George III pattern five guinea piece of 1773 for £18,000 . . . etc. etc.

The conclusion is obvious. Either the upper class is deliberately concealing itself from Sir Frederick’s gaze, or Sotheby’s have been dealing with those many workers who were unwilling to purchase Krugerands.

Shakey Promises

In the season of goodwill, we are reminded of the cheering lyric “We three kings of Orient are, bearing gifts we traverse afar”.

In this context, this writer’s mind turns naturally to the debonair oil minister of Saudi Arabia, Sheik Yamani. He certainly appears to be bearing gifts, and by all accounts at the expense of the oil companies :

  I declare categorically that Saudi Arabia does not want a single dollar more than it is getting right now for its oil. Every additional dollar should go to the consumer.

(Evening Standard 20/11/74).

Yamani clearly refers to the profits made by Exxon (Esso in UK) who announced profits of £348 million in July, and Royal Dutch Shell who declared £304 million in November. Although the oil companies dismissed the gigantic figures as

distorting substantially the underlying realities.
                                        (Evening Standard 7/11/74).

Sheik Yamani remained unimpressed by their squeals and further attacked.

   What angers us is the fact that oil concerns go out with their enormous profits and make investments that have nothing to do with the oil industry. Why does an American oil company buy a chain of department stores for 800m. dollars ?

(Evening Standard 20/11/74).

Although we could suggest a reason or two, we would advise that Yamani refer direct to Saudi Arabian businessman Adnan Khashoggi who is purchasing a third share in the Bank of San Jose to add to his already

extensive interests in various other investments and property in the U.S. and middle east; and owns two Banks in Walnut Creek near San Francisco.

(Financial Times 27/11/74)

In fact Sheik Yamani’s mask of naivété slipped somewhat when he gave the real reason for his apparent benevolence toward the consumer in an interview with the German weekly, Quick:

  We are of the opinion that oil price increases harm West Germany’s economic system in such a manner that we ourselves will be hurt.

(Reported in The Times 21/1174)

Ah well, you can’t expect the season of goodwill to last forever.

Bricks and the Builder

Although the Foreign Secretary, James Callaghan, by no means meant his analogy to be taken too seriously when generously referring to Harold Wilson as

not merely a thinker, he is an architect and a builder.
                              (Financial Times 29th November 1974)

We were just wondering if he caught the article in the previous day’s newspaper where the Earl of Kinnoul warned the assembled gentlefolk of the Lords:

Many builders had simply shut up shop, until conditions improved, he added.

Nor have the builders’ hands been tied by shortage of bricks:

  Mr. Jeremy Rowe, deputy managing director (London Brick Co. Ltd.) said production was being cut by 11m bricks a week because of the building slump, and another 10m. were being put into stock every week.

(Financial Times 29/11/74)

We take it that Mr. Wilson has developed a new building technique.

Coining it in

Sir Winston Churchill’s former secretary, and present chairman of the Churchill Centenary Trust, chose a rather left-handed way of explaining why the Trust’s appeal for £lm. has met with poor results (only £150,000 raised up to December 1974) since it was launched in April 1974.

  I suppose we must blame the slow response on the economic climate. The centenary could not have come at a worse time.

(Sunday Times 1 December 1974)

We are unable to suggest a more appropriate date for Sir Winston’s birth, but at least Churchill would have taken some relief from the following paragraph in the report:

  The trust has given its certificate of authenticity to some of these objects (souvenirs and medals) and is receiving between 5 and 10 per cent from the sales. But in other cases manufacturers have gone ahead without consultation and the trust has had to rely on these firm’s own generosity. In all cases the manufacturers arc receiving the lion’s share of the profits.

(our emphasis)

Well, who else should get the profit? This is capitalism as advocated by Churchill.

P.S. I'm a Ph.D.

Socialists have long criticised what passes for education under capitalism on the grounds that it has been designed to produce no more than a working class which has been sufficiently trained to run future generations of capitalism. You can imagine the dismay of “educational experts’’ when the students fail to take the vital step of entering into wage slavery. Mr. Chris Priddle, careers adviser at the South Bank Polytechnic complains:

  Politicians say there is an economic crisis, but our order books are full. Hundreds of firms like British Leyland, ICI, Shell, Ford, and Rolls-Royce are still looking for graduates.

(Times 21/11/74).

It would be premature however, to assume that graduate students are rejecting the concept of working for wages.

  Mr. Priddle is anxious for graduates to be taught how to improve their image when applying for jobs. They are very bad at filling out forms and do not seem to know how to market themselves in interviews.’

(Evening Standard 20/11/74).

One of Mr. Priddle’s associates, Mr. Michael Rines an expert on marketing and sales sees the difficulty starting at a somewhat earlier age:

  The problem starts at school, where kids are not taught how to sell themselves and how to lay out an examination answer attractively.

(Times 21/11/74).

If there was any doubt in student’s minds that they would have to “sell” themselves, this surely lays it on the line.

Alan D'Arcy

The Advantages of Religion . . . Or, she was talking to me so I said . . . (1975)

From the January 1975 issue of the Socialist Standard

Being an incorrigible listener to other people’s conversations, it is often both intriguing and frustrating wondering how a particular conversation ended. Also, sometimes it leads my own train of thoughts in a direction probably not otherwise followed.

Recently there was such an occasion. A couple of girls at my table were discussing what they were doing that evening and one of them said she was going to a talk on “The Advantages of Religion”. Now, apart from freak appearances like Billy Graham’s circus and the Festival of Light, Scientologists, the Pope’s refusal to accept that most of his world-wide flock are practising birth control, or the controversy as to whether it is right that Archbishops should be appointed by politicians, religion is not a subject to-day to which much thought is given by the majority of us; therefore this snippet set off my train of thought.

“The Advantages of Religion” — to whom?

To most Christians the church is the place to go to be baptized (i.e. accepted into the fold) married and buried. Jews regard their religion as something not only related to their “spiritual” life but also as actions and personal relations are governed by their part of their “race” and tradition. Their everyday religious teachings. To practising Mohammedans, Muslims and Buddhists, religion governs all their actions and forms the basis of their daily lives.

However, despite the differences in their teaching, attitudes and practices, the adherence to any of these religions is founded on two basic factors. The first is the unwillingness to admit that the life we have is the only one we are going to get; that there is no life after death, reincarnation or other “hereafter”, except in the redistribution of our organic matter and in the thoughts of those who knew us or to whom we have passed on our ideas. It is not difficult to understand why, living under the constant threat of war, insecurity and, in many cases, very real hardship and deprivation, people are looking for “pie in the sky when they die”. They feel that there must be something better to follow what they are experiencing now.

The second common factor is that, when faced with apparently insoluble problems or sorrow, it is of course comforting, and easier, to invoke the intervention of an all-powerful Being Above than to acknowledge that one has to rely on one’s own resources.

To sum up then; to the individual, religion is a palliative, an opiate, an apparent safety line or lifebelt thrown out on the stormy sea of life under capitalism.

The advantages to the system — the politician and capitalist, are more obvious. One thing which all religions practised in the so-called “civilized” world have in common is the teaching of humility and due respect to our “betters”, the endurance of suffering and hardship patiently in this world in the hope of better things to come. Obey your boss; work harder, listen to and follow your leaders, draw in your belts; fight for “your” country (they never do tell you which bit is yours though !). Obey your pastor, priest etc. and support your Church. The incongruity of churches preaching “thou shalt not kill” blessing men going to war and doing just that, does not seem to strike any of them. Of course. ‘your’ side is always right and on the side of God — fighting a just war — it is the ones whom you are going out to kill who are the villains. The fact that leaders of religion actively interfere with civil administration (e.g. the Roman Catholic Church in Ireland, Spain and Italy, the Religious Party in Israel) is accepted. So is the enormous wealth accumulated by Churches, often in the midst of appalling squalor and poverty.

At the end of my train of thought, I came to this conclusion: —

The advantages of religion to the capitalists are pretty obvious but, so far as I can see, there are no advantages in it for us — the workers. Reliance on “Someone up there” to solve our problems, and believing that the degree of our suffering and deprivation in this world will determine our reward in the next, only keeps us from doing something here and now — not to alleviate our problems, but to eliminate them — working for the abolishment of capitalism and the introduction of Socialism.

Eva Goodman

The Impotence of Reform (1975)

Book Review from the January 1975 issue of the Socialist Standard

Modern Social Reforms, Arthur B. Shostak. Collier-Macmillan Publishing Co. £2.95.

This book has the presumptous sub-title “Solving Today’s Social Problems”. The fact that today’s social problems are not amenable to being solved by reforms, somehow seems to have escaped the notice of Shostak, and the numerous tinkerers to whom he refers.

Shostak poses the question as being one of finding appropriate reforms within the framework of obstacles presented by human nature. Thus it is not class interest, property relationship and the profit motive of capitalism that render reforms futile. It is merely that we need a clearer grasp of what human nature really is, in order to formulate reforms that fill the bill.

As Socialists we argue that a clear understanding of capitalism is indispensable to comprehending what is commonly called “human nature”.
Shostak is like the man who craves recognition as an ace motor mechanic, but after closely examining the old banger parked in the road, fails to discover it is out of gas. While projecting ideas as possible reforms into the 1980’s and on to the turn of the century, Shostak notes that “the taxpayers’ appetite for further costly programmes is small”. It simply is not possible to legislate at will some abstract set of concepts (however seemingly laudable) and thereby get rid of poverty, bad housing, unemployment and war. Capitalism defeats all such policies.

Reforms have to be paid for. The capitalist class and governments, which are the political power centres of that class, are dominated by the economic dictates of capitalism. Profit is the main spring of the system. Taxes are a levy on the surplus-value (produced by the working class, but owned by the capitalists). Reforms are a particular kind of investment by the capitalist class as a whole. They need a schooling system, they need fairly healthy workers, they need a network of motorways, and a modern military complex with which to warn off rivals in the struggles for world markets and resources. There must also be enough surplus-value left for capital-renewal, so that fresh exploitation of wage-labour can bring forth future surpluses. The profit motive ultimately decides the priorities.

When a boom peters out and capitalism slides into recession the capitalists become reluctant to re-invest as profit margins begin to narrow. Pressure on governments to reduce taxation builds up, and governments start to look for things to cut back on. Government revenues do not come out of some bottomless purse. They come from the surplus wealth produced by wage-labour, and are therefore subject to the economic laws of capitalism, the machinations of vested interest, and the fluctuations of world markets.

Arthur Shostak is an American author, and despite the familiar ring of it all, he is aiming his “Modern
Social Reforms” at America’s “Social Problems”. He must currently be reading reports in the American newspapers similar to that in The Guardian, (25th October 1974) which tell of a sharp recession in America with unemployment expected to rise to seven and a half per cent., and car sales slumping by twenty one per cent., compared to the same period a year ago. He must be aware that “The anti-inflationary package now on the table represents little more than a timid compromise between various warring factions advising the President,” and that President Ford is intent upon a reduced and balanced federal budget, while maintaining war expenditures, and also as The Guardian report states:

  He has been told by several of his economic advisors that he cannot have both, and at the same time provide relief for the unemployed and lower income groups.

In his eager quest for answers Shostak looks at reform patterns in Japan, Israel, Canada, Scandinavia and Britain. None of the reforms enacted in any of these countries has solved any of the major social problems engendered by capitalism. There is no reason to suspect that their importation into the United States will improve their effectiveness.

Shostak sets down four main schools of thought on social reforms. The conservative, liberal, radical and visionary. A series of tables is produced to show the positions taken by each of these on various social problems. While in his thinking, the conservatives and liberals tied to the present system, the radicals are presented as revolutionaries, who regard themselves as temporary. When however they come to spell out their demands, they get no further than the usual leftist claptrap.

  A 90% tax on inheritance and estates and tax reforms to help the working man. Free medical care for everyone. Public ownership of utilities. Strict controls on the profits of banks . . .

So for example if Paul Getty dies (despite all the benefits available to him under free medical care) and leaves £300,000,000 his heirs would have to struggle along on the mere £30 millions left after taxes.

The visionaries are billed as way-out re-thinkers whose ranks subdivide to include believers in astrology, witchcraft, Scientology, and Buddhism. When pressed for a programme, Shostak cites Theodore Roszak, who offers among other irrelevancies:

  Labour-gift and bearer exchange systems in the local economy “and” . . . neighbourhood courts in a participative legal system.

Suddenly, as though from nowhere, and out of harmony with the confusion surrounding it, comes a shaft of light. During a discussion about work, Shostak relates that he put forward

  the less popular view that the root of the inadequacies lies in the ownership of the means of production.
  And the relatively fresher view that faults the quality of the jobs themselves and would thoroughly overhaul the very meaning of the work itself in preference to mere tinkering with the mechanics of work distribution.

No reform programme can meet what is implied in that paragraph. It implies that the means of production and distribution need to be owned in common, so that work can be guided by the principle “from each according to his ability, to each according to his need”. And man can direct his efforts to the common welfare of all, instead of the accumulation of profits by a few.

Finally, may we be pardoned an act of cruelty against Mr. Shostak, in order to be kind to him? He uses quotations to open his chapters. The one from a certain Todd Gitlin is particularly telling.

 Ideology shakes when it no longer convincingly interprets reality whereupon it must change to account for the new reality, or die.

The ideology of reformism is indissolubly bound to capitalism They cannot change. They will die together and make way for the reality of Socialism.

Harry Baldwin

A Quiet-Flowing Don (1975)

From the January 1975 issue of the Socialist Standard

A periodical called Britain-USSR which styles itself the Bulletin of the Great Britain-USSR Association is issued from 14 Grosvenor Place, London, SW1. Issue No. 44 has an article entitled “Participation in the USSR”.

It is clear from the periodical that a fair amount of to-ing and fro-ing goes on between the Association in London and their counterparts in Moscow but it is not naive to suggest that this body and its periodical are not simple mouthpieces of Russian propaganda as one usually expects. For example, the first article is a piece about Meyerhold, the Russian theatre director, which does not pull punches about the murder in a Stalinist prison of this Russian Jewish intellectual, a matter which the usual propaganda rag would keep quiet about.

However, if this body is merely a forum for those studying the Russian language and literature, then it behoves them to watch for infiltration on the part of some members whose intentions are less innocent. Of course, readers of the Socialist Standard will not be surprised to find pro-communist propaganda worming its way into a journal like this. It succeeds in doing so in far less likely vehicles; so that the article with which we are here concerned would normally not warrant discussion. We are all used to tendentious stuff from friends of the Communist (i.e. red-fascist) democracies (i.e. dictatorships). The point in the present case is not merely what is in the article, but who and what the writer is: “Dr. Parker lectures on the Soviet Union at the University of Oxford”.

So here we have an Oxford Don who has the power to propagate his views, partial as they clearly are, among the students committed to his care. One knows, of course, that these days students are ’ess malleable than they used to be and are liable to put two fingers up to any lecturer whose views they don't like. Nevertheless, one does not need to have a vivid imagination to realise that the Dr. Parkers are in a position to insinuate Moscow poison into the bloodstream of intellectuals in the making.

The word “participation” is fashionable these days. It would be so nice (for the ruling classes) if the ruled, the people who do the work which produces the wealth which the rulers are the only ones to really enjoy, could be made to feel that they were participating in their own exploitation. They would hardly feel so discontented about it and wouldn’t think about striking. (In Russia they can only think about it and not do it. I don’t suppose Dr. Parker goes out of his way to stress that to his students. That’s not the way the Don flows). Of course, the very fact that one has to discuss “participation” in regard to Russia in the same way as to western countries, gives the game away. If the workers owned society, who would talk about getting people to participate? You are given vague ideas about participation precisely because you don’t own. And if you don’t own, then it’s not Socialism, which is a society where people are not given the boon of participating (whatever that means): it’s all theirs, anyway. Of course our Don thinks Russia is a Socialist state, not realising that this is a contradiction in terms.

He tells us that in Russia, “membership of the Communist Party is the most obvious means of participation” and that the fifteen million members are all “activists” who have “the privilege and duty . . . to set the example of good citizenship”. Which leaves about 200 millions of non-members whose function in the Soviet paradise is to follow the party stooges. For those who don’t, there is “participation” in a labour camp in Siberia or some other delightful part of the Gulag Archipelago. Our Don proceeds to tell us (and doubtless tells his students) that the Soviets are the bodies in which “traditionally all power resides”; that “they are elected in the sense that all adults have the opportunity to endorse a pre-selected candidate, but do not vote as between several candidates”. Some election, some participation.

His article goes on to explain how eminently satisfactory this all is. Satisfactory to him, no doubt. No doubt Don Parker believes that things which would not go down here are perfectly acceptable to Russian wage-slaves. But the nub of his twisted argument comes in the following passage: “The Soviet system gives a high degree of satisfaction to millions who feel they are actively serving their country . . . This satisfaction doubtless outweighs any sense of deprivation that those same millions feel at that lack of those democratic freedoms which Western critics emphasise." Doubtless, he says. How did he free himself from doubt? Did he take a secret poll among the millions he talks of so glibly to see if they really enjoy being deprived of democratic freedoms?

It is this sort of conjuring trick, slipping “doubtless” while the student isn’t looking, which is the real crime. Well, he may have no doubts but the rulers in the Kremlin, for whom people like this Don act as propagandists (not to say lickspittles) have doubts aplenty. Never once in the grisly history of Russia, have they allowed their wage-slaves the chance to say freely whether they feel satisfaction. “Doubtless” the Kremlin knows that any such experiment in democratic participation would result in rather unpleasant happenings; people might participate to the extent of hanging red-fascist thugs on lamp posts, as in Budapest in ’56. If university teachers in the comparatively free west fill their students with such dishonest stuff, what kind of filth is being pumped out in the land where the other Don flows?

L. E. Weidberg

Confusion about Money and Inflation (1975)

From the January 1975 issue of the Socialist Standard

Under the influence of Professor Milton Friedman and other “monetarists” it has become fashionable for politicians and economists to discuss the rise of prices in relation to what they call “the money supply”.

Thus the City Editor of the Daily Mail, 18th November 1974:

Some experts say the money supply tells us how bad inflation is going to be in the months ahead. The increase of just 1¾ per cent in the past three months looks hopeful.

And in July last Mr. Healey said:

We have the rate of increase of the money supply under control. I propose to keep it so. It is running at roughly half the rate at which it was running under the previous government.

But the rate of the rise of prices did not halve or even slacken. In spite of whatever effect subsidies and price controls may have had, the rise of prices in the eight months after Healey became Chancellor was not smaller but greater than in the previous eight months under Tory government.

It is important to recognize that the theories of the monetarists are not at all the same as the theory of Marx. Marx showed that an excess issue of inconvertible paper currency depreciates the currency and causes prices to rise, though it is not the only factor affecting prices. Essentially, what the monetarists attempt to show is that the price level is mainly determined by the size of deposits in the banks.

What the monetarists use as their guide are the official figures for “money supply”, made up of currency (notes and coin) plus bank deposits; but the currency element in the figures is so small a proportion of the whole that the changes in the amount of “money supply” from month to month are dominated not by the increase of the note issue but by the changes in bank deposits.

Actually there are two official indexes of money supply, known as M1 and M3. The first includes current account bank deposits, while the second includes also money on deposit account. (Currency constitutes only about one-third of M1 and about 14 per cent, of M3.)

One of the absurdities of monetarist theory is that M1 and M3 rarely give the same guidance, yet both are used. They hardly ever move at the same rate, and often M1 is going down while M3 is stationary or going up. One factor in this is that if depositors transfer large amounts from current to deposit accounts it reduces M1 but does not affect M3 because M3 already includes all deposits whether on current or deposit account.

Professor James Morrell of Bradford University attacked the “money supply” concept in an article in the Sunday Telegraph on 10th November 1974:

Since one measure of Britain’s stock of money showed a 1.5 per cent rise during the past 12 months (third quarter 1973 to third quarter 1974) and another showed a rise of 13.5 per cent we may well wonder if the experts know what they are talking about.

But what of the theory that bank deposits determine prices? It is a very old theory, but one that will not stand examination. Figures are available which show that deposits in the Joint Stock banks rose from £159 million in 1877 to £890 million in 1910, but the price level was rather lower in 1910 than in 1877. And between 1921 and 1931, when prices fell by 35 per cent., London Clearing Bank deposits fell by about 9 per cent, in the first five years then, rose again to the original level.

As Professor Cannan pointed out:

Prices continued to wax and wane with currencies, and to exhibit towards the variations of bank deposits . . . complete indifference.

(Modern Currency and the Regulation of its Value, 1931, p. 95)

It is a reflection on the modern economists, including Professor Morrell, that with few exceptions they are not even prepared to look at the possibility that Marx’s theory would provide the explanation for inflation that they are unable to find elsewhere.

Edgar Hardcastle

The Real World Outside (1975)

From the January 1975 issue of the Socialist Standard

When socialism is established people will look back on today’s society and wonder how it was that we managed to look at everything upside-down. Take something like prison reform. The Socialist points out that crime as we know it can only occur in private property society. The majority of so-called crimes could not happen when everything is owned in common. After all, you can’t steal what you already own. So the obvious solution to the problem of the increasing crime rate is to establish a system of society where want and deprivation have been eliminated.

Now see how this strange social system we live under today completely distorts this clear way of looking at things and makes double think a necessity.

The Howard League for Penal Reform published their annual report in September of last year (The Guardian 16th September 1974.) This august body is the main organization that deals with proposals for improving conditions in prisons. The report states:

    The task of promoting pro-social (our emphasis) behaviour therefore consists primarily in making potential wrongdoers (which means all of us) care whether other people are hurt.

The Howard League are referring to people who behave anti-socially. What comes to your mind in this category? Some of the obvious examples are these: the production and use of instruments of war, the destruction of food crops whilst millions starve, the existence of a minority class living in luxury whilst the majority exist on the borders of poverty, the building of office blocks whilst lists of homeless get longer, the minority ownership and control of the means of life, the deliberate restriction (in a world of shortages) of production to what can be sold at a profit, etc. The list is endless. But the Howard League (like the good bastion of the privileged class that it is) thinks anti-social behaviour means only robbing a bank. Double-think? You decide.

The League point out in their report that putting a person in prison deprives him or her of liberty. They follow that perceptive observation by stating that prisoners, in addition to suffering a loss cf liberty itself:

Are also subject to numerous other deprivations. Of the right to communicate freely even with their families, their lawyers or their MPs: of the right to decide when to get up in the morning or to put the light out at night, of free choice of occupation or study.

You would be forgiven for thinking that the writers of the report had never seen the real world outside the prison gates. Do you choose when to get up in the morning or do you have an alarm clock, church bell or factory hooter telling you that it is time to go to work? Do you decide when to put the light out at night, or is that decided for you by knowing you have to get up for work in the morning and feeling too tired anyway to want to leave the light on? Free choice of occupation? Would you choose, if that word meant anything, the boring repetitive progress of employment you currently undergo? Do you communicate freely with your lawyers (have you ever seen one?) or your MP?

The truth is that capitalism is an inhuman form of society which boasts amongst its vile record the locking away of human beings. All the reformers in the world will not alter the fact that private property has its converse public deprivation. The result is that some people will inevitably try to take for themselves a little of what private property rules forbid, and be treated abominably for doing so. The solution to the problems of prisoners is not going to be found in reforming some of the repressive institutions in society. Only a repressive society needs repressive institutions. Socialist society will have no more need of prisons than it will have of bombs.

Ronnie Warrington

Politics: Syndicalism & the General Strike (1975)

From the January 1975 issue of the Socialist Standard

Just as a seed contains the varied hues in a flower, so capitalism at its birth contained all that has flowered into various expressions of revolt. The misery it brought has fostered ideas of short cuts to salvation that continually reappear with different signposts.

Thus, the main arguments of Syndicalism were repeated by the Bolsheviks and their servile followers in Britain in the ’twenties and ’thirties. The Claims that Syndicalism was based on the principles of Marx; that the mass of workers were ignorant and inert, and required leading (and forcing) into the promised land; that the days of theory had passed and the days of action come — these and a host of other ideas demonstrated not only a similarity in outlook between Syndicalism and Bolshevism, but the common source of both movements.

The backbone of Syndicalism was the General Strike. As a proposed means to achieve the workers’ emancipation it has an old history, and received considerable support before the capture of power by parliamentary action had come within the workers’ reach. Like Anarchism, it attracted artists and professional people by its insistence upon leadership, its violent attacks on established institutions, its spurning of theoretical knowledge, and its promise of rapid victory.

After they were expelled from the International the anarchist movement fell to pieces, unable to make progress because of their own opposition to all organization; and the acts of violence to which groups of anarchists resorted led to vigorous police action against them. In their extremity they sought a new lease of life by infiltrating the developing trade union movement. The propaganda of the General Strike fitted in with their anti-State and general-destruction policies, as well as the idea of the capture of power by a militant minority. Sorel describes the position as follows:

Many anarchists, tired at last of continually reading the same grandiloquent maledictions hurled at the capitalist system, set themselves to find a way which would lead them to acts which were really revolutionary. They became members of syndicates which, thanks to violent strikes, realised to a certain extent, the social war they had often heard spoken of. Historians will one day see in this entry of the anarchists into the syndicates one of the greatest events that has been produced in our times, and then the name of my poor friend Fernand Pelloutier will be as well known as it deserves to be.

(Reflections on Violence)

In England and America the influence was brief (though for a short time it captured the imaginations of some who should have known better). The main support was in countries where small industries flourished as France, Italy, Spain and Russia.

It was in France that the General Strike was first exhaustively discussed and propagated. The growth of the trade-union movement led to a struggle between its advocates and those of political action At the Trade Union Congress in 1879 the Guesdist movement, which stood for the conquest of political power, scored a temporary victory, but political action subsequently lost its hold. To the impatient, industrial action appeared as a royal and easy road without having to wait. In 1888 the Congress of the French National Federation of Trade Unions voted in favour of the General Strike and the idea then spread rapidly, even receiving some support from political parties. Among its champions was Aristide Briand who, later as a capitalist cabinet minister, was its vigorous opponent and oppressor.

The arguments for the General Strike at that time may be summed up as follows. To strike was legal, so no matter how widespread it might be the government was unable to prosecute the strikers. A general stoppage of work would reduce the ruling class to famine; it would need to be operated only a short time to compel the government to capitulate and bring the workers into control of power. Its spontaneity meant that it could begin at any time and, hastened by propaganda and organization, bring about the revolution rapidly. The workers must have an organization to take over production afterwards, and the trade unions were admirably suited for this purpose.

Although a minority in the trade-union movement, the anarchists soon occupied key positions and by the middle of the ’nineties were the dominating section. Apart from their fanatical activity, they were assisted by the method of selecting delegates by group and not by number. Being divided in many small groups while their opponents were in fewer larger ones, the anarchists were able to capture the controlling influence; the few highly industrialized parts of France were not able to send as many delegates to conferences as the scattered backward parts where the anarchists predominated. Consequently each congress was “packed” by anarchists — a form of “tactics” with which we are still familiar.

Under their influence, General Strike propaganda went beyond just sitting down and folding arms. Sabotage was adopted, involving the destruction of means of production and the forcing of the support of the unwilling. The practical policy that grew out of the French Revolution and was adopted by Blanqui, Bakunin, De Leon and Lenin was based on the idea that an active minority can carry with it an inert and ignorant mass. It is a policy that depends upon leadership and always places power in the hands of one or two outstanding persons, finally degenerating into personal quarrels between these leaders. Behind it, though rarely recognized, is the conflict between idealism and materialism: the power of the idea alone against the power of material circumstances, which include ideas.

In 1895 a new federation of workers was formed, the General Confederation of Labour (known as the CGT — Confederation General de Travail). It included the General Strike as part of its programme. A conglomeration of unions and federations, it comprised all political shades but was ruled by the anarchist minority until 1909, when the crushing of a large-scale postal strike made clear the weakness of industrial action against the power of the state. The opposition to the General Strike policy, particularly by the Guesdists, also showed its failings. For example, the syndicalists were compelled to include anti-militarist propaganda, as an admission that governmental power would not collapse in a general cessation of work.

Probably the most complete expression of the syndicalist outlook is  contained in Arnold Roller’s The Social General Strike (published by the Debating Club No. I, Chicago, 1905). Sliding over difficulties and inconsistencies, the writer distinguishes between strikes for higher wages or political privileges and the strike. According to him the General Strike begins in a small way, spreads in sympathetic strikes, and develops into the overthrowing of the system; it is the culmination of hundreds of earlier strikes in which the workers have gained experience and an ever-stronger sense of solidarity.

Following that argument, one would imagine that the majority of workers had gradually acquired sufficient class-consciousness to understand their social position and desire a change in the basis of society. But this is not the syndicalist view. According to them, the mass of workers are backward and inert until the General Strike commences. Then, in the course of the movement, they become more active and enthusiastic until they convert the strike from the attainment of some minor object into the social revolution. And this change is supposed to occur in a few days or weeks, as production and distribution are brought to a standstill: knowledge grows like a mushroom out of the quagmires of disaster!

Roller is not disturbed by the fact that all workers will not come out on strike. He says: “This ideal of propaganda will, however, in spite of its beauty always be a dream.” He claims that it is only necessary to interrupt production in the whole country for long enough to totally disorganize capitalist society; this, he claims, can be done by sabotage in the principal industries. (But at another time he insists that a great advantage of the General Strike, that will gain for it many adherents who lack courage, is that it will be perfectly legal.) He makes the following very significant statement:

Modern industry, with its extremely specialised labour division and complications, is but poorly adapted to oppose a general strike caused by a minority, for the strike will completely wreck the whole system necessary for the management of production, and vital to the life of modem society.

The sabotage to assist in this wrecking was to include cutting telephone and telegraph wires; tearing up railway lines; causing accidents; loosening screws in machinery; destroying supports and applying fire and dynamite in mines; sinking ships; and many other methods of destruction — a choice assortment is also described by Pataud and Pouget in their phantasy Syndicalism and the Co-operative Commonwealth, 1913. Thus, as in the policy of Bakunin, society is to be completely wrecked.

In such circumstances, what would be the position of the workers? The inert mass that has suddenly developed “revolutionary fervour” is supposed to trust local leaders, who will pacify them by reporting the progress of the revolution (how, with the means of communication smashed, is not explained). The feeding of the population in the midst of this wreckage is also glossed over with childlike simplicity, with the answer that hungry people will attack stores of food. Leaving out of consideration the action of the government, what city has stores of food to support its inhabitants for any length of time? And what about water and sanitation? It does not require a great deal of imagination to foresee disease and devastation sweeping through cities like London, Paris, Berlin and New York. If the syndicalists were as successful as they hoped, it would not be a question of bringing the ruling class to their knees but of submerging everyone in a common holocaust of disaster.

But before matters had reached such a pitch the government would have stepped in with the forces at its disposal. Roller has an inkling of this. He claims first that the destruction would be so widespread that there would be insufficient military forces to cope with it, and then that it is essential to get the military on the side of the workers: “For the revolutionising of the present order of society, anti-militarism and its propaganda is an absolute necessary supplement to the General Strike.”

Time after time the power of governments to smash big strikes has been demonstrated. Sometimes naked power has been used, sometimes concessions made, and sometimes the workers have been starved into subjection. The condition the syndicalists take for granted, lack of knowledge on the part of the majority, is a condition that is bound to defeat them by playing into the government’s hands. The experience of large strikes has been the very opposite of that anticipated by the syndicalists. The government smashed the French postal workers in 1909 by simply calling the postal workers to the colours and then sending them back to their old jobs as soldiers. Soldiers are average members of the working class made more amenable by the discipline to which they are subjected and, like the mass of workers up to the present, accept the suppression of "disorder" as a proper course of action.

Gilmac.

Part 2 of this article will deal with the Syndicalist movement in the United States of America.

Economics: Do Banks Produce Wealth? (1975)

From the January 1975 issue of the Socialist Standard

There are three main divisions within capitalist society which share the surplus-value which is socially extracted from the working class; the industrialist, the landlord and the banker. These divisions historically reflect the application of the division of labour to the specialized investment of capital in any field of production and distribution, any process of circulation, of which banking is part.

Individual capitalists, or groups of capitalists, may have financial interests in all three of these groups. There is nothing to stop the industrial capitalist from becoming his own landlord and banker, but were he to do so he would require to hold huge reserves of cash, or have part of his capital locked up in bricks and mortar, thus preventing it from being more usefully employed in the exploitation of human labour-power. Generally speaking, the industrialist, the banker and the landlord pursue their own separate courses. Their interests are intertwined but nevertheless are antagonistic. Whilst it is true that the capitalist class have more in common with each other than with the working class, it is necessary to add that a class society must inevitably produce a conflict of interest between capitalist and capitalist, as it does between capitalist and worker, and worker and worker.

Interest and Profit

In capitalist society all wealth takes the form of commodities and is bought and sold. Capital itself is subject to this process: the price of capital represents the amount paid for the use-value of that commodity for a prescribed period. The lender sells to the borrower the use-value of his capital, and expects to receive an additional payment (i.e. interest) as well as having the original sum returned to him at the end of the mutually agreed period.

If we assume annual average rate of profit is 10%, this would mean that anyone owning £10,000, employed as capital, and provided it was used with average intelligence under normal conditions, would expect this capital to yield a profit of £1,000. If, however, he gives or transfers this £10,000 to another person who also proposes to use this as capital, then he has given to that person the power to produce a profit of £1,000; a surplus value which would have cost him nothing. Obviously this person does not expect to receive this privilege without making some payments in return. If he decides to pay, say, £250 to the original owner out of the £1,000 profit, for making the £10,000 capital available to him, that part of the profit is called interest. It is a payment made for the use-value of the capital.

The banker makes his money out of the process of indirectly bringing borrower and lender together. The banker borrows money at say 10% and lends it at say 14%, and the difference between the two rates, after deduction of expenses of book-keeping, rent, wages, etc., represents his profit. It should be borne in mind that the rate of profit has its origin in the productive process, or at the point of production: that is, at the place and places where socially useful human energy or labour-power transforms natural wealth and natural forces into commodities. The essence of the capitalist form of exploitation is that the capitalist does not, nor cannot, pay the full amount of the value of that socially-necessary labour, and pays only the value of the living labour as represented by wages, and that is not the same thing.

Capital

The surplus-value is the difference between the value of the product and the value of the producers. Living labour produces a greater value than it takes to reproduce itself, and consequently all surplus- value comes from the exploitation of human labour-power under a wages system. Banks produce nothing. They are really middlemen or custodians of idle capital which must be available as a hoard, as potential money capital waiting to be put to use. “The purely technical labour of paying and receiving money constitutes an employment by itself which necessitates the making of balance, the balancing of accounts, as far as money serves as a means of payment. This labour belongs to the expenses of circulation and does not create any value. It is abbreviated by being organized as a special department of agents who perform this work for the rest of the capitalist class . . (Marx, Capital Vol. Ill, p.373). Their profit is made during the process of circulation, as is the case with all commercial and interest-bearing capital.

The difference between interest-bearing capital and industrial capital, or capital used in the productive process where wage-labour is exploited, is that the owner of money capital who wishes to earn interest on that money throws it into circulation not as capital for himself, but so that others can use it; and consequently gains a profit by this service. The basic difference is that whereas the individual capitalist has his capital locked up in factories, mines, heavy machinery, ships and means of transport and distribution, stocks of materials, or committed to a wages bill, the lender of interest-bearing capital invariably has it returned to him. The main exception to the rule is when certain money has been loaned to the government, in which case the lender has a legal title to a permanent income at a fixed rate of interest.

Banks not Dominant

It is quite true that individual sums of money deposited with banks may be too small to function as capital by themselves, but they can be gathered together into useful masses of capital, and advanced to industrialists and others who use the banking system. In the main, however, the hoard of capital which is deposited with the banks is the residue of unconsumcd profits, or capital which is surplus to immediate requirements.

Contrary to popular belief, banks do not dominate the capitalist system. This mistaken view is due to the fact that wealth is represented by enormous quantities of money. All wealth under capitalism expresses its value in the symbolic money form, but that form tends to conceal the fact that capital exists in the physical implements of the labour, factories, minerals, buildings, ships, etc. and that these are the dominant form of capital; the expansion of capital can only arise from these sources and not from the variety of banking and commercial transactions involving interest-bearing capital. At the present time banks have advanced £8,897 million to the manufacturing industries, including £2,103 million to the engineering and metal industries, £2,247 million to the construction industry, and £1,187 million to food, drink and tobacco. The balance of the loans is mainly divided between chemicals, electrical engineering, shipbuilding, agriculture, and forestry (Financial Statistics, HMSO, Table 53. Oct. 1974).

An estimate of the value of the physical assets of the UK wealth was published recently. The total value of the assets was estimated at £400,000 millions. Of this, the figure of £175,000 million was allocated as representing the value of assets which were directly productive. These are mainly the manufacturing industries referred to above. (Times 16/11/74: “Wealth of the UK” by J. Rothman). The banks’ advances, on the basis of this estimate, show that the banks have a stake in British manufacturing industries of about 5 per cent., and this could hardly be regarded as a dominant interest. In any case, banks do not exist to lend their own money, but other people’s. The total advances made overall by the London Clearing Banks — Barclay’s, Lloyd’s, Midland, National Westminster, Williams & Glyn’s, amount to £21,992 million, but the combined deposit and current accounts (money loaned by depositors to the banks) were £37,374 million (Committee of London Clearing Banks statistical unit, 16th Oct. 74).

Effects of Crises

The Labour Party and the Communist Party mistakenly argue that the slump of the ’thirties was due to the fact that the banks withheld loans from industrialists. A variation of the same argument being used today by politicians of all parties, including the residue of the Left and a number of economists, is that the present high rate of bank interest will dissuade the capitalists from borrowing for fresh investment, thus causing unemployment by reducing production. The assumption behind this rather naive conception of capitalism is that as long as the industrial capitalist can find capital, whether by borrowing from a bank or out of his hoarded resources, he can maintain full employment. The point that they constantly overlook is that the function of capital is to produce profit. This can only become a reality when the commodities produced can be sold.

If for some reason, whether it be that the market is already overloaded and cannot absorb further commodities, or that over-production has already taken place, then production will be scaled down, curtailed, or in some cases halted entirely, and workers will be laid off. In these circumstances there will be little prospect of profit, and as experience has shown a number of capitalists, the smaller ones, go bankrupt. “In the first 9 months of this year, 4,000 Receiving Orders were made ... an increase of 40% over the same period for last year” (Sunday Telegraph City 4, 24 Nov. 74). All the machinations of the banks, either by advancing or retarding credit, whether charging low interest rates or not, cannot alter this. At the moment there is no shortage of cash available for investment, and the banks are only too eager to make capital available to bona-fide capitalists. However, in a failing market there is little incentive to the industrial capitalist to commit himself to paying interest when the prospects of earning surplus-value on the borrowed money are extremely remote. Only these capitalists in dire financial trouble, or those who have to meet certain contracted obligations, will be forced to borrow.

Generally speaking, in periods of crisis, when the capitalist’s position deteriorates and he has to meet payments, he will borrow money almost at any price to stay in business. Invariably the rise in the rate of interest implies a fall in the value of shares and securities. Interest comes out of profit, and in these periods the fact that the capitalist needs to borrow means that his normal source of profit has temporarily dried up, therefore the price of shares has fallen. The present rate of interest, i.e. 14-16 per cent, is the highest for over forty years, and the price of shares the lowest for sixteen years (Financial Times Index 168.5, 23 Nov. 74). There is, of course, the element of inflation written into the present interest rate. Unlike real wealth in the physical sense, loan capital exists as a symbolic paper hoard, and as such is subject to the hazards of inflation. Were the commercial capitalists not to take some preventive action their assets, as they exist purely in the monetary form, would be eroded year by year as a result of inflation. So the price of capital rises as with other prices, and the high interest rate is the protective mechanism the banks etc. use to protect their assets. The Utopian promise of low interest rates, at times when the operation of capitalism is forcing high ones, can be ruled out as a pious hope.

The industrial capitalist does not suffer to any great extent from the ravages of inflation as his assets consist mainly of real wealth, whose relative value rises as the purchasing power of paper currency falls, and he can adjust his prices upwards taking into account the rising cost of production. On the subject of inflation generally, we are reminded of the small boy at the seaside saying to his father “Dad, where does the water go when the tide goes out?”. It had obviously gone elsewhere, but it certainly wasn’t lost, and neither is wealth during periods of inflation.

The rate of interest, or bank rate, itself is not arbitrarily fixed. It fluctuates according to the conditions of the market. Supply and demand cause competition between buyers and sellers, and raises or lowers prices. Competition between borrowers (buyers of capital) and sellers (owners of capital) operating through their banking agents, determines the rate of interest.

The mythology surrounding the power of banking helps those who take the view that this vast institution is so necessary that the prospect of a world without money would be unthinkable. The present world with money is becoming uninhabitable, and that is why we want to establish Socialism.

(To be concluded)

Jim D'Arcy