The End of Bangla Desh (1971)

From the July 1971 issue of the Socialist Standard

"Reddened with blood, bathed in tears, the crazy world was marking its course through splice with the groans of the sick, the hungry and injured.” (Andreyev)

East Pakistan, so recently shuddering from a gigantic cyclone, was then the scene of an appalling blood-bath. The government used tanks and air-power to massacre its own people. The official story is that the Bengali autonomists had been preparing a revolt for 26 March, a revolt which was wisely and firmly put down by the loyal armed forces.

But what is really behind it all? Why should a state — already $5,000m in the red — engage in a ruinous internal war? Why is it so vitally important for Yahya Khan to “preserve the unity and integrity” of Pakistan, when 98 per cent of the East Wing supports the Awami League autonomists? And why have the Bengalis of East Pakistan been so bitter and persistent in their opposition, for at least a decade, to the existing political set-up and so vehement in their demand for autonomy? And would autonomy do them any good if they got it?

To attempt an answer to these questions, we must first go back a bit in history. At the end of the independence struggle, the Muslims of India were demanding a separate homeland to be sited in areas where they formed a majority of the population. Hence, partition: a partition which resulted in a secular India, led by Nehru and the Congress Party, confronting a Muslim Pakistan made hostile by the savage inter-communal riots and massacres all over the sub-continent, which took place at the time of Independence.

Pakistan is in the North of India. East Pakistan, with about 56 per cent of the population, is in the northeast and is part of the old province of Bengal. Its language is Bengali, its main cereal crop rice, its main exports jute and tea; it has a predominantly agricultural economy with per capita income about 200 rupees, as compared with the average for Pakistan as a whole which is 418 rupees (about £30). The land is low-lying and subject to floods, tornadoes and cyclones. In the nine years from 1960-69, there were 15 “major natural calamities”—6 floods, 7 cyclones and 2 tornadoes; in only one of these years “no major calamity occurred” but in 1968 "all the 17 districts were affected” in a single flood. In this period more than 50,000 people died in these various calamities and in 1 cyclone alone in 1965 more than 20,000 died. (Pakistan Observer, 22 November 1970).

The West Wing of Pakistan comprises four provinces: Sind, Punjab, Baluchistan and the North-West Frontier Province. They speak Sindi, Punjabi and Pushtu, and together make up the remaining 44 per cent of the population. Its main cereal crop is wheat, it exports cotton and other manufactured goods— mainly to East Pakistan which is a protected market due to a tariff wall. Whilst the East Wing is adjacent to Burma and the sweaty jungles of the Far East, the West Wing is closer in character to the desert countries of the Middle East. The widely separated halves of Pakistan have nothing in common but their religion.

After Independence, the economy was deteriorating under a succession of incompetent and corrupt governments, until in 1958 General Ayub Khan, backed by the Army, seized power. By 1968, when threatened with civil war over his trial of the East Wing leader (Sheikh Mujibur Rahman) he was forced to hand over power to General Yahya Kahn, corruption and graft had increased to remarkable proportions. Ayub’s own family had become one of the richest in the country and most of the economy was controlled and owned by a clique notorious as the "twenty families”—all closely connected with Ayub and his Punjabi generals.

It was during the ten years of Ayub’s rule that the nationalist Bengali movement for autonomy grew up. It fed greedily on such appalling statistics as the fact that defence expenditure rose in ten years from 30 per cent to about 60 per cent of total government spending; that in 1961 the East was receiving less than 15 per cent of the government’s revenue budget expenditure; that in 1959-60 the Capital Budget allocated the East Wing a little over naif what it allocated the West Wing; that more schools, hospitals, university institutions, irrigation works, plush government jobs and lush government contracts went to the Punjabis, who thanks to their control of the armed forces had got complete control of the whole administration.

Further, although East Pakistan every year had a good balance of payments—thanks to its jute and tea exports—most of the foreign exchange earned was used to finance the growing industries of the West, not to mention its soaring demand for imported cars, washing machines and fridges. The country now spends well over 50 per cent of the GNP on defence and has incurred foreign debts of over $5,000m., which use up 20 per cent of all Pakistan’s foreign exchange earnings for debt repayments. Add to all this the fact that there is an annual transfer of resources from East to West of around Rs.250m. and you can understand why the growing movement for autonomy so closely resembles that of a colony bidding for independence.

East Pakistan has 84 per cent illiteracy, 28 per cent unemployment, a population density of about 800 per sq. mile, and average peasant holdings of 3 acres with 3 head of cattle/buffaloes, 1 sheep/goat, 4 fowls and about 2.5 acres growing rice (Pakistan Observer, 25 November 1970). Its population is 40 per cent aged under 14 and has an infant and child mortality rate as high as its life expectancy is low.

When Yahya Khan came into power in 1968, there was a possibility of civil war due partly to the unrest in the East Wing which centred on the trial for “treason” of Mujibur Rahman and his associates. Yahya bowed to the storm, dropped the trials and made speeches about restoring a democratic framework, holding elections and establishing a Constitution. Political parties were allowed to form. In the West, Z. A. Bhutto—a former Cabinet Minister under Ayub—emerged as a front-runner with his People’s Democratic Party, while in the East Wing Mujibur Rahman’s nationalist Awami League (a city-based organisation with support from most moderate business and professional people) and Maulana Bashani’s (Maoist) Awami Party (supported by students and having a strong village grassroots-level support); both demanded autonomy. In the end the Awami Party much splintered by dissenting groups, decided to boycott the elections.

The first one-man, one-vote elections ever to be held in Pakistan were postponed last year from September to December, due to floods in the East Wing in the summer. Then, three weeks before the December date, the cyclone struck. No very accurate figure has emerged (or ever will now) of just how many lost their lives in and after that appalling night of 12 November. Probably more than 900,000 men, women and, above all, children will have died in the disaster area of only about 4 million people: this amounts to a casualty rate of nearly 23 per cent. (The worst ever recorded cyclones in Bengal, those of 1737 and 1876, only caused casualties of about 300,000 each).

After the cyclone, it became obvious, as miserable days and weeks dragged by, that the administration was not exactly exerting itself to get aid to the survivors. Even a fortnight after the disaster only one cargo aircraft and one helicopter were in action to drop supplies over a total land area of 9,300 square miles.

There is also considerable evidence that the Administration could have prevented many of the casualties by broadcasting an evacuation warning and by not concealing what it knew of. the size, speed and proximity of the impending cyclone. A fortnight before the disaster, meteorological warnings were reaching the (Punjabi) Governor of East Pakistan and continued in a crescendo until, 8 hours before the cyclone struck, the new radar station at Cox’s Bazar announced that the unprecedented pressure had burst its instruments. Yet no warning to evacuate went out on the radio and still the Governor did not take any steps to prepare for relief work. Probably only a quarter of the casualties were unavoidable, another quarter died as a result of the tardiness and ineffectiveness of the relief operation and 50 per cent of those who died perished within reach of shelters and safe places which would have protected them in the cyclone had they received a radio evacuation signal. The Met officers and Radio Pakistan could not broadcast a general evacuation order without sanction from the Govemor.

Yet the election was not postponed. Bengalis seething with bitterness backed the Awami League 98 per cent and thereby gave Mujib’s party a clear majority in the National Assembly to be held to create a constitution. The Assembly was not held. Yahya Kahn talked to Mujib, privately, for weeks while the Army prepared its plan and brought from the West Wing immense reinforcements, especially of tanks trucks and aircraft. Yahya also brought over Bhutto—a man much detested in the East—possibly in the hope of provoking riots, which the Army would then have to quell. Finally having completed his preparations, he broke off his talks with Mujib and flew back to Rawalpindi. The Army then moved in, massacring students, Awami Leaguers, Hindus, men, women and children—anything that moved. Bengalis in panic fled the city and with primitive Second War rifles and bamboo sticks fought the Army in pathetic local stands. Millions of refugees have crossed the border to the refugee camps of India. Paddy fields are not being planted out, the jute crop is a write-off, and jute-mills and tea-plantations have suffered badly. There is at present no prospect of things getting really back to normal and the armed forces are still being reinforced. For the Bengalis the prospect is one of a quick death by napalm or a slow one by starvation.

This war, if any, is one that is being fought over plunder. The power to grab the profits of the jute and tea trades, the power to use East Bengal as a captive market for the industries of West Pakistan, the power to import cheaply the agricultural produce of the East: these are the reasons why Yahya Kahn is determined to “preserve the unity and integrity of Pakistan”.

And for what would the Bengalis be fighting, if they are fighting indeed and not just dying? Why, for the ineffable right to be exploited by Mr. Big Business Bhuiya or Choudhury or Haque, instead of by General Khan or one of General Khan's many friends and relatives.

Charmian Skelton

What about the Common Market: A socialist guide (1971)

From the July 1971 issue of the Socialist Standard

What is the Common Market?

The European Economic Community (EEC), to give it its proper name, is a customs and economic union between France, West Germany, Italy, Belgium, Holland and Luxemburg set up in 1957 under the Treaty of Rome. The aims were to create one huge market by abolishing all customs barriers between the Six  and by erecting a uniform tariff against goods from outside and to establish common agriculture, indirect tax, transport and energy policies. These have largely been achieved. The next stage, to which tentative steps have been taken, would be full economic union with a common currency and after that maybe military and political union.

Why was the Common Market set up?

Basically because big industry needs a big market. After the war the rulers of the industrial countries of western Europe, whose economic rivalries had twice plunged the world into war, realised somewhat late that the traditional European nation-State was not large enough either as a market or as an outlet for investment. In this sense the Common Market is an example of the continuous centralization of capital into bigger and bigger units and it was no accident that it grew out of the free trade in coal and steel the Six had introduced in 1953. Also, Germany wanted free access for its industrial goods to France and France free access for its grain to Germany.

Why didn’t Britain join at the start?

Britain’s pattern of trade was different. The Commonwealth was not only a market for British industrial goods and an outlet for investment but was also a source of cheap food and raw materials. To have joined would have meant giving this up for something whose success was uncertain.

Why does Britain want to join now?

Growing industrialisation in the Commonwealth changed Britain’s pattern of trade. Towards the end of the 1950’s Europe emerged as the best alternative market for Britain’s industrial goods. After failing to stop the Common Market by organising a wider European industrial free trade area, Britain under a Conservative government applied to join in 1961 only to be rejected. The present negotiations arise out of a second application to join made in 1967 under a Labour government.

So, this is all a question of markets?

More or less, and so is essentially a capitalist problem. Joining the Common Market is an attempted solution to the problem of finding new markets for British capitalism whose goods have not been selling so well in recent years. It is not a problem that concerns wage and salary earners, either here or in the Six.

But aren’t some British industrialists opposed to entry?

Yes, those with investments and trade interests in the Commonwealth. They are in a minority but do have some influence on sections of the Conservative Party. The argument for and against the Common Market is basically between those firms who think they will gain and those who think they will lose from entry. Russia, too, is opposed to the Common Market as a rival capitalist power and so therefore is the British Communist Party and the pro-Russia section of the Labour Party who have concocted various allegedly socialist reasons why workers should take the side of those against entry.

What will happen if Britain joins?

After a transitional period Britain will have to bring down its tariffs against the Six (and any others like Ireland, Denmark and Norway who might join at the same time) and to put up tariffs against outsiders, including the Commonwealth. British agricultural policy will have to fall in line with that of the Six.

Won’t that mean an increase in food prices?

Yes. For historical reasons continental Europe has protected agriculture through high prices while Britain has pursued a "cheap food’’ policy. The British industrial capitalists were strong enough in the 19th century to abolish the Corn Laws which kept food prices — and wages — high. The continental capitalists were weak and, to get protection for their industry, had to ally themselves with the big landowners and to agree to protection for agriculture too.

But won’t this make wage and salary earners worse off?

Not necessarily, since the level of wages is largely determined by the cost of living. Lower prices mean lower wages, as the workers of Britain found after the Corn Laws were repealed in 1846 and as the Six recognise when they say that for Britain to keep its "cheap food” policy would be unfair competition. Similarly, higher prices mean higher money wages. This is not an automatic process of course. Workers have to fight through trade unions and strikes to keep money wages rising along with prices. But this is what they’ve got to do all the time in all countries, and what workers in Britain must do whether Britain is in or out of the Common Market.

What will happen to wages if Britain joins?

They say money wages are higher in all the countries of the Six except Italy, but this is what you would expect if food prices are higher. And these wage levels were not achieved without struggle. There was a General Strike in Belgium in 1960 and in France in 1968 and a wage explosion in Holland after the failure of job evaluation; in recent years strikes have become more frequent in Italy and have even broken out in Germany.

Won’t there be an influx of cheap Italian labour?

Maybe, but the answer would not be co-operation with the anti-Common Market section of British industry. The important point is that workers in all countries face the same problems and so have a common interest in uniting to solve them.

What about taxes?

The governments of the Six raise their money more by indirect than by direct taxes. Critics say that indirect taxes fall more on the poor and give this as a reason why workers should support those against entry. That indirect taxes — such as the value added tax — fall on the poor is only an illusion. All taxes in the end fall on rent, interest and profit as only the rich can afford to pay them. The tax system is irrelevant as far as the overall standard of living of wage and salary earners is concerned. Insofar as taxes raise the cost of living they can, if the workers are strong enough, be passed on to employers as higher money wages.

What about social benefits?

Supporters of entry say they are better, but as you would expect some are and some are not. Family allowances, which generally are higher in the Six, were long looked upon with suspicion by trade unions in this country as a wage subsidy for employers, which is what they are. The higher the family allowance paid by the State the less the employer need pay the family man. In any event, “social benefits” along with contributions and income tax are a means of evening out the income of workers so as to ensure that nobody is paid either too much or too little to keep fit to work, and leave the overall standard of living unchanged.

Will we lose our sovereignty?

What do you mean our sovereignty? Not having a stake in the country we have nothing to lose. Our rulers may have to hand over part of their law-making powers to the Common Market, but that’s not our worry. It makes no real difference whether we are ruled from Brussels or London.

But won’t we be ruled by bureaucrats from Brussels?

That’s a bit of an exaggeration. The powers of the EEC Commission in Brussels were granted by the governments of the Six which (like those of the four who are applying to join) depend on popular election and majority acceptance. Governments and bureaucrats can only get away with what people let them.

Isn’t a United States of Europe a good idea?

No, it would just be another capitalist super-power armed with nuclear weapons. Some nationalist delusions might disappear, but this would be no advance if they were replaced by another, different one.

What is the attitude of The Socialist Party of Great Britain and The World Socialist Party of Ireland to the Common Market?

First, that whether or not Britain joins is a capitalist, not a working classe issue. Second, that Britain’s joining would not solve, and is not meant to solve, working class problems; it may not even solve British capitalism’s problem of markets. Third, that, equally, working class problems will remain if Britain stays out. We are neither for nor against entry and regard this as an irrelevant issue. We advocate instead the establishment of a world community without frontiers based on common ownership with production solely for use.

How would you suggest we vote in any referendum on the Common Market?

The government don’t want to risk one in Britain for fear that the anti-German and imperialist prejudices stirred up in the past might result in a vote for “no”. But in Ireland there’s got to be one. We suggest abstention, or rather rejection of the false choice by writing “World Socialism” across the ballot paper.

Aspect: Can Banks Create Credit? (1971)

The Aspect column from the July 1971 issue of the Socialist Standard

Confusion about banking operations and the power of bankers has been in evidence for a long time. It was known before 1848, and that year saw the publication of two works putting opposite points of view. One was Lectures on the Nature and Use of Money in which John Gray outlined a scheme which was the forerunner of the Social Credit Movement founded by Major Douglas in the nineteen twenties. The other was John Stuart Mill’s Principles of Political Economy which contained the following:

“Credit has a great but not, as many people seem to suppose, a magical power; it cannot make something out of nothing … It seems strange that there should be any need to point out that credit, being only permission to use the capital of another person, the means of production cannot be increased by it, but only transferred … The same sum cannot be used as capital both by the owner and also by the person to whom it is lent . . .”

Part of the confusion arose out of the loose use of the term “credit creation”; by some writers to mean merely the grant of a loan by a bank, but by others to mean what Mill had in mind as making something out of nothing.

Marx on occasion wrote of the “creation of credit and capital” by the banks but not meaning anything more than the act of lending or investing. Elsewhere he described banks as merely institutions for bringing together and relending sums deposited by depositors. He ridiculed the “illusions concerning the miraculous power of the credit and banking system”, which he said, were held by those who failed to understand the nature of capitalist production and the credit system (Capital, Vol. III p. 713).

Sir Ralph Hawtrey in his Currency and Credit dealt with another confusion of terms:

“It is true that we are accustomed to think of bank credit as money. But this is only because for the practical purposes of every day the distinction between bank credits and money is rarely of any importance. And for all that a bank credit is merely a debt, differing from other debts only in the facilities allowed by the banker for transferring it to another creditor. No one imagines that a trade debt is money, though it may be as good an asset as a bank credit” (2nd Edition, p. 5).

Major Douglas, like John Gray, would have rejected outright the views of Mill, Marx and Hawtrey on credit. He claimed that bank loans are the issue of money just like the issue of notes by the Bank of England and that, by making loans, “a bank acquires securities for nothing”, and that “it is absolutely correct to say that . . . new money has been created by a stroke of the banker’s pen.” (The Monopoly of Credit, 1931 pp. 15 and 17). In the words of one of his supporters, banks can create “untold wealth at the cost of a few drops of ink and the fraction of a clerk’s wages”.

Basically the dispute is between those who hold that banks are merely intermediaries to whom depositors make purchasing power available by depositing with them, and which then make that purchasing power, or most of it, available to others by transferring it to them as loans or using it to purchase securities etc; or whether the banks themselves, by making loans create the largest part of the deposits.

Starting from the production of value by the application of human labour to nature-given materials and its conversion into money, is it that some part is lent to the banks in the form of deposits, for the banks to relend or invest, or is it the banks which create large amounts over and above the amounts deposited?

G. D. H. Cole accepted the “creationist” view. He wrote that bank loans “represent a real creation of additional money — additional purchasing power”. (What Everybody Wants to know about Money, p.39).

Among those who have held the “intermediary” view, along with Mill and Marx were many bankers and, notably Professor Edwin Cannan in his An Economist’s Protest.

Of particular interest were Reginald McKenna, politician turned banker, who was Chairman of the Midland Bank, and J. M. Keynes, both of whom at first supported creationist theory and later changed their attitudes.

One of many anti-creationist statements made by bankers, was that by Walter Leaf, Chairman of the Westminster Bank:

“The banks can lend no more than they can borrow — in fact not nearly so much. If anyone in the deposit banking system can be called a ‘creator of credit’ it is the depositors; for the banks are strictly limited in their lending operations by the amount which the depositors think fit to leave with them” (Banking. Home University Library, 1926, p. 102).

Hartley Withers, sometime editor of the Economist popularised creationist theory in his The Manufacture of Money and used the phrase “every bank loan makes a deposit”, later expanded to “every bank loan or purchase of securities creates a deposit”; and its converse that every withdrawal of a loan or sale of a security destroys a deposit.

McKenna repeated this and provided Major Douglas with weighty support.

The theory was given official endorsement in the Report of the MacMillan Committee 1931, (Committee on Finance and Industry) and found its way into the textbooks. Though McKenna was a member of the Committee he then denied that he agreed with Major Douglas about the creation of credit; which was really rather hard on Douglas who had, after all, only taken McKenna’s words at their face value. Another signatory of the Report was Professor T. E. Gregory who held the Chair of Banking and Currency at the London School of Economics and who in that capacity took Cannan’s line.

The Macmillan Committee’s support for creationist theory is still widely accepted. It turned up recently in Ernest Mandel’s Marxist Economic Theory where Mandel quotes it with approval.

One argument used by creationists to support their case was that, without creationist theory, it was not possible to explain how the deposits of the commercial banks could exceed the total amount of notes and coin in circulation. This is easily disposed of. If a bank receives deposits of £5 million a week and has £4 million a week withdrawn by depositors, deposits will increase by £1 million a week and the eventual total is in no way limited by the amount of currency in circulation. In 1937 the Post Office Savings Bank had no cheque facilities and made no loans to businesses or private borrowers, but its total deposits did in fact exceed the total amount of notes and coin in circulation with the public. The deposits were invested in government securities.

The statement of the “creationist” case in the MacMillan Report started with the following:

“It is not unnatural to think of the deposits of a bank as being created by the public through the deposit of cash representing either savings or amounts which are not for the time being required to meet expenditure. But the bulk of the deposits arise out of the action of the banks themselves, for by granting loans, allowing money to be drawn on an overdraft or purchasing securities, a bank creates a credit in its books which is the equivalent of a deposit. A simple illustration, in which it will be convenient to assume that all banking is concentrated in one bank will make this clear”.

The illustration assumed that a depositor deposited £1,000 in cash. The bank then lent £900 which was withdrawn by cheque and came back as new deposits. At this stage the deposits in the bank totalled £1,900 made up of the original £1,000 and the later deposits of £900. Against this liability the bank would show, on the assets side of its balance, cash £1,000 and loans to customers £900.

This lending process was repeated with nine more loans of £900, so that the bank’s books would then show £10,000 deposits, balanced by £1,000 cash and £9,000 loans owed to it by borrowers. The bank had thus “created” deposits of £9,000 by making loans, and the creationist case was proved. Or was it?

Certainly the Committee got the answer they wanted but in view of the way the conditions were rigged that was not surprising; little in the example had any resemblance to real banking conditions.

Not only did the Report make the thoroughly artificial assumption of only one bank in existence but it also assumed that none of the borrowers made withdrawals except by cheque, never by cash to hold and not to be returned to the bank. This enabled them to proceed on the basis that all the cheques drawn (or all the cash withdrawn) come back to the one bank — there was no other bank to which they could go. Actually the Report did not allow for any withdrawal in cash at all but treated the £1,000 cash deposit as remaining unchanged throughout the operations; which meant that the Committee was assuming, but without saying so, that a change had occurred in the world outside the bank which led to a permanent increase by £1,000 in the amount of cash left in the bank.

This line of reasoning, which isolates from a continuous in-and-out flow of deposits and withdrawals of cheques and cash, one single deposit of cash, is fallacious. If it were valid it could be applied in reverse; that is the Committee could have isolated a single withdrawal of £1,000 cash and treated it is a permanent reduction by £1,000 of the amount of cash left in the bank. It only needed one of the ten borrowers of £900 to take it out in cash or destroy the whole of the Committee’s case.

It appears to have been a belated recognition of this fallacy that later led J. M. Keynes to put a view contrary to that of the Report he had signed.

In his General Theory of Employment, Interest and Money (1936) he wrote:

“It is supposed . . . that the banking system can make it possible for investment to occur to which no saving corresponds. But no one can save without acquiring an asset, whether it be cash or a debt or capital goods, and no one can acquire an asset which he did not previously possess, unless either an asset of equal value is newly produced or someone else parts with an asset of that value which he previously had . . . The notion that the creation of credit by the banking system allows investment to take place to which ‘no genuine saving’ corresponds can only be the result of isolating one of the consequences of the increased bank-credit to the exclusion of others” (p. 80-1).

Actually, under the conditions assumed in the Report the bank was needlessly modest in making loans of only £9,000. They could have made it £90,000, or any figure they had cared to name, because every cheque had to come back to the one bank and they had in practice, but without saying so, prescribed that nobody was to draw and hold any of the £1,000 cash.

They also claimed that the result would be the same if there were many banks, i.e. that all withdrawals would automatically come back into the banking system, but this, as already mentioned, was based on the fallacy of supposing that the £1,000 deposit of cash was a permanent increase of cash in the banking system but without going into the change of outside conditions which would make it possible.

In practice there is nothing automatic about deposits. Banks have to attract money on deposit account by paying interest of millions of pounds on it and they spend tens of thousands of pounds on advertisements to attract new depositors.

The Committee also overlooked the fact that banking figures vary according to the method of investing. If a depositor with £1,000 in the bank draws a cheque to lend that amount to a business, bank balance sheet figures are completely unaffected since the £1,000 deposit has merely been transferred from the depositor’s account to the account of the business; but if the depositor leaves the £1,000 on deposit and the bank lends £1,000 to the business, bank deposits and loans both increase by £1,000.

The absurdity of creationist theory can be seen in practical terms if we consider what happens if the owner of £1,000 lends it direct to a business firm, and the effect if he deposits it in a bank and the bank then lends to the same firm. The MacMillan Committee’s example would have it that though the original owner had only £1,000 to dispose of the bank can lend £9,000 to the firm if it receives the £1,000 on deposit.

The Committee’s example also took it for granted that banks with money to lend can always find “creditworthy” clients who want to borrow all the banks have available. When trade is slack, as in recent months, they cannot.

If creationist theory had been correct banks would make profit at a rate far above that of industry — “fabulous profits” and “hundreds per cent” were the claims. It does not happen.

There is one company with wide interests in publishing, oil, engineering and other manufacturing activities, S. Pearson and Son Ltd. which also has a controlling interest in a bank, Lazards. Yet only about a sixth of Pearson’s profits come from Lazards. Lazards had a director on the MacMillan Committee who was also on the board of Lloyds Bank. It seems that he failed to convince Lazards — assuming that he even tried — that they really have the creationist powers set out in the Report he signed.

The MacMillan Report worked out its figures on the basis that banks need to keep ten per cent of their deposits in cash “to meet the demands of customers”. This ten per cent ratio enabled them to suppose that banks can lend nine times the amount of the £1,000 deposit. The conventional cash ratio is now down to 8 per cent, which would increase the creationist power to eleven and a half times the deposit. But the cash ratio is largely window dressing. If there were a mass withdrawal by depositors of the London Clearing Banks, £700 million of notes and cash would be quite ineffective if the depositors wanted to withdraw their £11,000 million of deposits. What banks endeavour to do is to anticipate events and match outgoing withdrawals and loans with incoming deposits and repayments of loans. If they could match these outgoing and incomings completely day by day they would need no cash in their tills, without the banks thereby being any less safe. If they could get it down to one per cent the assumed creationist powers would then be 99 times the £1,000 deposit. The cash ratio of the Savings Bank in 1937 was a quarter of one per cent.

Another consequence of creationist theory, accepted by its supporters, is that bank loans by increasing purchasing power have a determining influence on the price level. The facts show this to be baseless. Between the first quarter of 1921 and the first quarter of 1933 prices were falling continuously, by a total of forty four per cent. They fell when the deposits and loans of the London Clearing Banks were falling, when they were stationary and when they were rising. At the beginning of 1931 deposits and loans were at the same level as in 1921 but prices had fallen by forty per cent. Between 1926 and 1933 deposits and loans went up by seventeen per cent while prices went down by nineteen per cent. (Incidentally the MacMillan Committee wanted prices to rise in order to cure the depression). Bank deficits went down slightly between 1968 and 1970 while prices went up by twelve per cent.

Mention has been made of Marx having a view on the specific question of credit creation which was in line with that of some other economists, but he did not share their views on wider aspects. He wrote:

“The superficiality of Political Economy shows itself in the fact that it looks upon the expansion and contraction of credit which is a mere symptom of the periodic changes of the industrial cycle, as their cause” (Capital Vol. I. p. 695)

Against logic and all the weight of evidence, credit creationism still has its believers. Professor Cannan hit the nail on the head when he called them “the mystical school of banking theorists”.

Edgar Hardcastle

At Home and Abroad . . . (1971)

The Home and Abroad Column from the July 1971 issue of the Socialist Standard

At Home

The crisis in the shipyards of the Upper Clyde group showed capitalism, and its apologists, at their most typical. The crisis came not for any lack of skill or materials or need; it came simply because the yards cannot fulfill the basic capitalist requirement that they operate at a profit. In that situation UCS may well have to shut down, no matter how many ships may be sailing which for one reason or another should be replaced—and no matter how much waste of resources a closure might represent. The Labour Party may howl with rage at the shut down, as they often do when the principles of capitalism which they uphold when in office come into operation when they are in opposition. The Tories say they are applying their policy of making all undertakings stand on their own feet. But if this were to be generally applied, what panic there would be among the parasites of the ruling class !

Among, for example, the royal family who, if required to stand alone on their own feet would quickly collapse into a heap. They have just decided that they can no longer stagger along on the pittance of the few hundred thousands they get each year, even if this does supplement the income from their massive private wealth. Workers whose lives are given up to the toil which produces all this opulence by the side of indescribable misery should not be deceived into thinking that what the press called the royal “wage” claim makes the queen and her hangers-on anything other than the highest, the most publicised and among the richest, of the capitalist class.

To the members of that class, problems like rising prices, for example, are seen as if through the other end of the telescope from the one to which workers’ eyes are glued. We do not need the Labour Party to remind us that the Tories promised to end this problem, as Labour themselves promised. Now, the election pledges are as usual being forgotten, if sometimes they are remembered when something happens like Minister of Agriculture Prior’s gaffe. Perhaps he was trying the unusual course of trying to be honest; or perhaps he is just a fool; or are the Tories playing the excessively simple game of admitting, quickly and in words which all can understand, that they cannot control capitalism? Whichever it is, the working class could do themselves a good turn by undestanding.

Politics

It seems that the government will not have an easy ride into the Common Market, whatever happens at the negotiations. In this country there is a strengthening lobby which is pledged to fight the British entry. One theme which this lobby is playing is the fact that the people have not been consulted on the issue. This is not, of course, entirely true; anyone who voted for either Labour or Tory in the last election thinking that he was opposing Britain joining the EEC must have a serious mental blockage. More to the point, when were the people ever consulted on this kind of issue? When was there a referendum on a declaration of war? When did we have the chance to vote on issues like racist immigration Bills? Anti-trade union laws? So why make an exception over the Common Market? Could it be that the Labour Party are seeing in the issue the chance to grab quite a few votes and know that a middle line policy will grab them all the more and all the quicker? It is not unknown for issues like the Common Market to be obscured by a propaganda smokescreen behind which a capitalist party makes its attack. And the talk about a referendum is no more than a smokescreen put out to hide the essential fact that worker have no interests in the issue; whether Britain goes in or not will have no fundamental effect on our standing as workers.

Abroad

How romantic, how thrilling, that the Russians have an orbiting space station where they can grow things and watch the weather and the vegetation and so on down on earth! What brave men are their astronauts, to whizz up into space and start crawling about from one ship to another just so that they can grow those things and watch all the others! What clever scientists, to think it all up and then design all the ships and the equipment! Perhaps there will still be some of the thrills and the romance left, when it becomes obvious that the stations (there will assuredly be more of them) are also being used, probably primarily, for purposes connected with the war machines of the space powers. The world was similarly thrilled when man first flew and we all know where that landed us. Space travel, and the courage and ability which goes into it, shows again what human beings could do to improve our environment —and how capitalism corrupts it all. 

What capitalism does is being witnessed in India and East Pakistan, where disease follows war follows flood and will probably be followed by yet more horrible disaster. It is now coming out, that places like East Pakistan have for a long time been in a turmoil of bloodshed, with political murders so frequent that they hardly make the news. Other murders, of course, are even less like to be noticed. Across the border in Calcutta there is a similar story. It is likely now that this already desperate situation will explode into something even more horrifying. The answer which capitalism has to this is to appeal for charity and to represent the affair as a regrettable accident. We should remember the original motives for conquering the Indian continent, and for keeping it in the economic state it was kept in for so long, and then for giving it its “independence” in the way it was. In this perspective the horror of East Pakistan becomes more logical—and even more horrible.

50 Years Ago: What makes Socialists? (1971)

The 50 Years Ago column from the July 1971 issue of the Socialist Standard

Socialist propaganda is only one factor in the process of enlightenment. Far more powerful is the economic development with its growing insecurity of life for everyone who lives by selling his or her services to an employer. It is this great factor that usually forces workers to listen to Socialist propaganda.

★

The class division between workers and employers is more clearly shown in the case of a company than of an employer who is known personally to his workpeople. It is shown more clearly by a combination, and most clearly of all by a trust. No wage slave is sure of his job under this development, and even the lordly bank clerk and the respectable teacher have been forced to form organisations of a trade union character to protect themselves against the worsening of their economic position and the growing insecurity of life.

Long before the Socialist propaganda will reach the majority of these people the growth of the contradictions in capitalism will have forced them to examine various supposed ways of escape, and they will be compelled to take up the study of Socialism as furnishing the only solution to these problems.

(From a reply to a correspondent in the Socialist Standard, July 1921).

The McMasters (1971)

Film Review from the July 1971 issue of the Socialist Standard

The McMasters (Directed by Alf Kjellin.)

Benjie, a negro, returns after four years civil-warring on the side of the North to the ranch of his adopted father, McMaster in the deep south.

McMaster (Burl Ives) is the only one to offer a welcome, since Benjie’s blue uniform is resented in the Bible-thumping, Reconstruction — pulverised, poverty stricken, secessionist, racist cattle community.

Benjie gets half the ranch from McMaster, who realises he is past managing it alone. The ranch hands leave in disgust. Benjie saves some half-starved Indians from a lynching for cattle-rustling, and offers them work which they accept. Benjie’s generosity to his employees is partly fired by his realisation that he himself is, to the hostile community, scum like the Indians: "Everyone knows them niggers aint people— they aint got souls”, is how the town storekeeper justifies riding with the local Ku Klux Klan, and brainwashes his young son, who already longs to watch his first lynching.

Benjie gets an Indian squaw as "a gift"(!) from the tribe of grateful wage-slaves. Finally Benjie’s incongruous landowner status, his bloody defence of his cattle from salt-poisoning Klansmen, his marriage in the white man’s church to his squaw, his new found self-respect and refusal to be intimidated into selling-out drive the local Klan, led by Gilby, (Jack Palance) the confederate war-hero embittered by the loss of his arm, to attempt to lynch him. The first attempt ‘only’ gets Benjie’s wife, Robin, raped and two Klansmen killed before they are driven off the ranch.

The cattle season over, Benjie realises that with the Indians who have returned to their village, he and McMaster will be unable to protect the ranch or his wife in the event of further brawls. He sends Robin back to her tribe for safety, and tries to enlist the aid of the Indians but the tribal elders make it clear that Benjie is in their eyes the same as the whites, who, as property owners will spill blood for it, and they want no part in a property war . . . "The land belongs to no-one—you like us Benjie, you homeless”.

The inevitable showdown with the Klan follows—a burning cross is the signal for a bloodthirsty finale in which McMaster is shot dead, the ranch buildings are razed and Benjie himself is only saved from a coldblooded burning by the inexplicable intervention of the younger Indian braves—his former employees—led by the articulate primitive communist ideologist, brother of Benjie’s wife. Gilby is killed, the Klan are temporarily routed, but after Benjie recovers from his wounds at the Indian village, to the complete bewilderment of Robin’s brother he once again staggers back to rebuild his smallholding, to face the Klan and probable death with Robin.

Robin’s brother's cries ring out as the film closes: "You’re crazy Benjie, you got no home, you like us, you got no home”. . . but Benjie, pathetically mesmerised by his title deeds, already has his values fixed—property before his own, his friends, his wife, his Indian brothers’ lives.

All in all, a film expressing all the contradictions of the class and caste-ridden society of post civil war America. The Indian elders alone attract sympathy, with their humanism and refusal to sacrifice themselves for property. But they, one senses, are doomed to an ever-more precarious nomadic existence and probable extinction from starvation (despite their rustling activities) or from epidemic.

The film will appeal to all those who flock to watch ketchup being spilled in great quantities, who are titillated and thrilled by the depiction of inexorable violence. The stark scenes in it are overtly commercial. No relief from the all-pervading atmosphere of brutalising and dehumanising 1865 Bible Belt Society is offered, indeed the producer seems to want us to project the despair into the present day. Certainly no relief is realistically possible in the historical context of absolute scarcity and the dominance of property, status and compensatory racialist ideas do not lend themselves to any. But a hundred years later scarcity is a myth; competition and the hostility, mutual suspicion, atomization and savagery it engenders are archaic and unnecessary; the Benjies of the world need no longer cling to tangibles at such a cost; the day of the Indian is near again, at a much higher and more secure level of technology and culture.

C. H.

The Back-To-Work Service (1971)

Aneurin Bevan by Vicky.

Book Review from the July 1971 issue of the Socialist Standard

Private Practice within the National Health Service, by Joan Sohn-Rethel and John Carrier. Socialist Medical Association. 20p.

Your Health Service in Danger. Socialist Medical Association. 5p.

The Mental Health Services. Socialist Medical Association. 5p.

Nobody could object to the original idea behind the National Health Service: that medical advice and treatment in and out of hospital as well as drugs and appliances should be provided free to those in need. This is essentially what will happen in Socialism.

The point the Socialist Party of Great Britain made was that, introduced under capitalism as a reform, a free health service would never work as intended. These pamphlets by the “Socialist” Medical Association (a Labour Party affiliate) unwittingly confirm this.

Hospitals were nationalised in 1948 in the sense that a nation-wide hospital system was created out of the private and municipal hospitals which had grown up in the previous two hundred years. Whilst recognising the benefit to workers of not having to worry so much about finding the money to pay for medical treatment, we pointed out that the NHS was, and could only be under capitalism, essentially a back-to-work service for employers whose primary function was to patch up sick workers as cheaply as possible so that they could resume producing profits. Those who no employer will take on—the chronic sick, the mentally ill, the old and the disabled—are under capitalism just a charge on profits to be dealt with as cheaply as possible.

This of course is not meant as a criticism of the dedicated work under difficult conditions of workers employed in the NHS. They are making the best of a bad job. But the NHS has always been starved of funds, quite apart from the fact that in many cases the treatment can only be a palliative since a basic cause of some conditions is the poverty and insecurity of capitalism.

Another development was predictable too. Since the NHS was basically a service to patch up workers and since financial stringency led to growing waiting lists, the rich would try to buy themselves better treatment. Hence the growth of “private practice”.

Doctors must obviously play a key role in any health service and, as reformist governments in many countries have found, are a conservative group. The SMA wanted (and still wants) all doctors to be salaried employees of the State and all private practice to be banned. The doctors, and especially the consultants, however, wished to remain independent professional people or “private contractors” and were strong enough to force this on Bevan, the first postwar Minister of Health and to get him to allow some special pay-beds in NHS hospitals (which Bevan, the hypocrite, was later to use when he was ill). According to the SMA this was the thin end of the wedge which has undermined the Health Service.

Private consultations and treatment are, in their view, merely queue-jumping. They even go so far as to hint that in some cases (where a consultant is paid for a private examination and then gets a patient into an NHS, rather than a private bed) it is a hidden form of bribery. Maybe, but this sort of thing is inevitable in the conditions of shortage which will survive as long as capitalism lasts.

Judged by its original aims the NHS has been a failure. It is in a state of perpetual crisis. Once again the economic forces of capitalism have overcome the intentions of well-meaning reformers.

Adam Buick

The Labour Party (1971)

From the July 1971 issue of the Socialist Standard

A Capitalist Party

Clause Four of the Labour Party’s constitution, in speaking of securing for, “the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible . . ." is vague and open to a number of conflicting interpretations. "Common ownership of the means of production, distribution and exchange . . . " is completely meaningless when one realises that the means of exchange are inseparable from the rest of the framework of the capitalist system. For the means of exchange exist only to facilitate the exchange of commodities, and commodity production is production for the market and not for the satisfaction of human needs. It is in fact the basis of capitalist production. Through exchange the capitalists realise the fruits of their legalised robbery of the working class, their surplus value; hence the impossibility of the community commonly owning institutions and mechanisms which exist solely to serve the interests of a minority ruling class.

That the Labour Party can display such ignorance of the nature of capitalist society is understandable when one realises that they have embraced all the ‘new’, short-lived and inadequate theories of orthodox, respectable and academic economics. But even if their object had been beyond reproach in its phrasing, this would still not have made the Labour Party a socialist party, for a party is more than just a declaration of intention. Its organisation, its teachings and its behaviour are the essential things to consider when one categorises any party and judged by these things the Labour Party must be condemned as just one other of the parties that seek to run British capitalism, its working class origin notwithstanding.

The party of Socialism in this country is the Socialist Party of Great Britain which made Socialism its one and only Object in 1904, that is two years before the Labour Party as such was born. The Labour Party, by contrast, had no programme in its Constitution until 1918 because, “it did not wish to exclude Non-Socialists . . . ” (S. F. Markham M.P.) and in the famous policy statement of that year, Labour and the New Social Order which was supposed to have committed the party to Socialism, the word is not even mentioned. The Labour Party then, as now, was concerned with votes above all and was afraid to frighten the electorate. The Socialist Party, on the other hand, saw that only a class-conscious working class could build Socialism. It made its task therefore the advancement of an unadulterated, uncompromising Socialist programme. When the Labour Party did get round to using the term Socialism they simply made the task of imparting Socialist ideas twice as difficult; instead of educating they confused.

Every one of the measures introduced by the Labour Party during its governments has been completely compatible with the structure of capitalist society, and the opposition shown by Tories to measures of State ownership and control is not an opposition to the basic principle as such, but merely represents differing views on the advisability and timing of such measures. The past actions of Tory and Liberal governments, and of other frankly capitalist governments throughout the world, prove that State ownership is just one of the forms by which capitalist ownership can be safeguarded. This holds good for Russia too, for there the new ruling class exploits the workers directly through the State machine and their surplus value can be taken by them openly or disguised as salary form.

The Labour Party has also for years been guilty of encouraging the belief that the system in Russia was Socialist, and one of the claims made for a Labour government at the end of the last war was that it would be able to talk more successfully to a ‘Socialist Russia’ than a Tory Government! The only party that was able to present a Socialist analysis of the Russian Revolution, and that from its very beginning, was logically enough the Socialist Party which, using its Marxian understanding of economics and society, was able to show that the revolution could not produce Socialism but would industrialise and modernise Russia on a capitalist basis suited to needs of a giant 20th Century nation.

Opportunism was inevitable in a party where the bulk of members are only needed to pay their dues, to help at elections and to assist in fund raising. As a party the Labour Party is now a battle ground for the professional politician and for the seeker after power and prestige. Many of the founders of the Labour Party had a completely different view of the future of their party but they built on working-class backwardness not on a class-conscious, enlightened support. And so the distortion of their vision was inevitable.

Melvin Harris

Free transport or free access? (1971)

From the July 1971 issue of the Socialist Standard

Should travel on London’s trains and buses be free? Not so long ago this would have been, and was, dismissed as absurd. But now the GLC — which since 1970 has been in charge of London Transport — is looking at the idea. So is the London Labour Party, and economists, transport planners, passenger action groups, Tories, Liberals and even businessmen are amongst its supporters.

Many claims are made for free transport: It will leave most people better off financially. It will help solve the traffic problem. If train and bus fares were abolished, its advocates say, more people would leave their cars at home or at parking places away from the centre and use instead the trains and buses. This would relieve traffic congestion and allow a better bus service, which would encourage still more people to use public transport. The number of cars on the road would fall, reducing pollution and the need to build roads through residential areas.

WHO IS GOING TO PAY?

Maybe, but where is the money to come from? “Free” transport is only free to the passenger at the time he travels. The cost of running the transport system has to be paid for even if no fares are taken. One way, since London Transport is now under the GLC, would be to finance “free” transport from the rates. But since most passengers will also be ratepayers might not people lose as higher rates what they gained as free travel? 

The advocates of free transport have an answer to this. They say that transporting people to and from work and the shops is unprofitable and has to be subsidised anyway and that fares-free public transport financed from rates or taxes could be the cheapest way of doing this if you take into account the present cost of the pollution, congestion and road-building caused by public transport’s great rival, the motor car. They also produce figures to show that the family man working in the centre of London would tend to gain from fares-free transport on the rates.

LOWER WAGES AND SALARIES 

But even if the saving from fares is greater than the increase in rates this does not necessarily mean that people would be better off financially. Fares are an important item in the cost of living and it is the cost of living which largely determines the level of wages and salaries. Whatever reduces the cost of living will tend also to reduce wages. This would apply equally if fares were abolished.

This is obvious in the case of civil servants and others who are paid a special “London Allowance” to cover the higher cost of housing and travelling in London. Free London transport would narrow the difference between the cost of living in London and the rest of the country and would lead employers to seek to reduce this extra payment.

Thousands of booking clerks and ticket collectors would be made redundant, swelling the number of jobseekers and helping to keep wages down.

A WAGE SUBSIDY FOR EMPLOYERS 

Those who claim that free transport would save people “considerable” sums of money are assuming that free services are an addition to wages. The opposite is nearer the truth: they are a hidden deduction from wages from which employers benefit the most.

If employers are to get a good day’s work they must pay their workers adequately. The wage packet or salary cheque must allow the workers enough to pay for the food, clothing, housing, travel and the other things they must have to keep themselves fit to work. If travel to and from work were free employers would no longer have to include in the wage packet any sum to cover travelling expenses. What to the workers would be a “free” service would to their employers be a wage subsidy.

VESTED INTERESTS

Free transport under capitalism has little to offer wage and salary earners, but it would benefit some sections of the business world. If travel were free throughout the London area it would be no more expensive to shop in the centre than to shop locally, so the big West End stores would gain. If the cost fell on the rates then landlords and property-owners would be subsidising the big employers. Car manufacturers and road construction firms, too, would lose from a reform that discouraged the use of the motor car.

Within the context of capitalism any campaign for free transport would become a struggle between these various vested interests. If free transport ever comes it will be to serve such interests and not for the benefit of the wage and salary earners who use public transport. Nor is there any reason to expect the quality of the service to improve if fares were abolished, precisely because most passengers are workers.

FREE ACCESS FOR ALL

There is nothing wrong with free transport as an idea. Far from it. Fares do restrict people’s freedom to travel; fare-collecting and ticket-issuing is a waste of manpower and machinery; transport in Socialist society will be run as a free service for people to use as and when they want to. But a distinction must be drawn between free transport as a reform within capitalism and free transport as part of Socialist society where all goods and services will be free.

Free transport under capitalism would be a deduction from wages and a subsidy for employers. Before people can benefit from it, the whole wages system must be abolished. The means of production must cease to be the class property of a privileged few and become the common property of the whole community. This, too, would create the framework within which the problem of the motor car and its pollution and destruction can be rationally tackled.

Once the means of production are the common heritage of all and are under democratic control, then the profit motive and the price system can be abolished. Wealth can be produced solely for people to use. People can have free access not only to travel facilities but to all the other things they need to live and enjoy life. Goods will not be priced, but will be available for all to take freely according to their needs.

Adam Buick

The educated working class (1971)

From the July 1971 issue of the Socialist Standard

“Yes, I agree with your arguments, but how are you going to get everyone else to?” This is a common reaction of people when the idea of establishing Socialism is put to them. Ninety nine out of a hundred agree it would be pleasant to live in a moneyless world where they had free access to everything they required, where threats like war and pollution no longer existed, where work was not something they were forced to do and therefore disliked, but something they did out of choice and took pride and pleasure in. Yet when we have satisfied them that the world’s resources, if exploited with a view to use and not to profit, could satisfy all the needs of all human beings, and when they have accepted that it is not against “human nature” for people to live together in harmony, to associate rather than to compete: then they are inclined to say that this is all very well in theory, but how are you going to convince the majority of people that Socialism would be best for them?

How indeed? Firstly let us take a look at today’s working class (all those who live by selling their mental and physical energies for a wage or salary). More than ever before workers are skilled workers. They need to be to meet the requirements of advanced capitalist production. In the 1965 Senate Hearings before the Clark Subcommittee on Manpower and Education it is stated that “the market for the unskilled is shrinking” and “unskilled, semiskilled and service jobs which together accounted for 56 per cent of the labour force in the 1960’s will by 1970 decrease to only 25 percent of the labour force.” In today’s technology relatively fewer people are needed to do such jobs as digging roads, cleaning sewers and unloading ships. Mechanisation already dominates these fields. Conversely more and more are needed to research into new methods of producing cheaply and competitively, to build and maintain sophisticated machinery, to administer the complexities of international finance and commerce, and to train workers who will do these jobs.

Hence the vast sums of money capitalism is spending on education to enable workers to operate its highly complex technology. The Plowden Report (Children and their Primary Schools, 1967), in the section entitled “Economic yields of Primary Education” talks about “American attempts to calculate a rate of return on successive years of primary and later education” (par. 1173) and tells how in the United States “data have been presented to show that the total amount of education received, and hence the stock of educated human capital, is growing faster than that of physical capital and estimates have been made of the contribution of education to economic growth. From this work it is clear that investment in education in Britain could make a substantial contribution to faster growth” (par. 1171).

But how do these developments help to clear the ground for understanding Socialism? The answer lies in the type of education capitalism is forced to offer to produce skilled wage labourers. Modern capitalist education is far from being the highly specialised thing that many people imagine. It is quite true that in higher eduaction, for example, most students take just one or two subjects. But these studies are not aimed at specific jobs. Students, after graduating, invariably have to undergo some further form of training course for the profession they decide to take up. And the jobs people do often have no direct relation to their studies. What higher education has done — or aims to do — is to educate future workers to think clearly and critically about their subject in order for them to be able to apply the critical capacity they thereby acquire to their future employment. It would be impracticable for capitalism to educate people for one specific job. The capitalist system, by its highly competitive nature, is so dynamic and so susceptible to creating obsolescence of employment that workers need to be able to adapt quickly to new jobs when old skills have been surpassed by the development of cheaper and more efficient methods of production.

Dr. James E. Russell of the Educational Policies Commission of the U.S.A. National Education Association said in 1965 “. . . we are facing a situation where we cannot tell whether a given form of training will carry a man as much as 10 years in time.” (quoted in The Manpower Revolution, ed. G. L. Magnum). Stress is consistently laid upon the need to produce versatile minds in order to cope with the ever-changing technology of modern capitalism.

Industry has the last word on this with the warning of Leslie Williams, former deputy chairman of ICI, that science graduates in industry would need "flexibility of outlook and capacity to deal with a great variety of problems”. He therefore called for courses providing “an adequate scientific education and more opportunity for development of creative qualities”. (The Times, 24 November 1970, report of a lecture to the Royal Society of Arts).

A good deal of what has been said so far relates exclusively to what many people regard as the elite realms of higher education. So an objection might now arise on the lines that since those who pass into higher education are a relatively small percentage of their age-group, our previous observations and conclusions do not apply to the majority of the population.

In Britain at present the number of people in the age-group in higher education is indeed a minority (although, at over 20 per cent a bigger one than most people think). However from 1959-60 to 1968-9 the number of people on student grants trebled and from 1961-2 to 1968-9 expenditure on higher education doubled to £l,853m. (Statistics of Education No. 1969. Vol. 5. Finance and Awards). Then Education Planning Paper No. 2 on Student Numbers in Higher Education (Oct. 1970) projects conservatively that by 1981 there will be 835,000 full-time students, more than double the present number and a full 28 per cent of the age-group. This is not an arbitrary development. For the reasons we have already seen, capitalism needs trained minds and more trained minds. In America over 40 per cent of the age grade attends one of the 2,500 colleges and universities, and proportions are steadily rising.

There education is the biggest single employer with almost 30 per cent of the whole population working in what has been termed the "knowledge industry”. California already sends 80 per cent of its high-school students on to higher education and in the words of Californian educationalist, Dr. Martin Trow, "is wrestling with the transition from mass to universal higher education”, (from an article in The Times by Stuart Maclure, 13 January 1971). Russia too, world’s second biggest capitalist power is not far behind America in its higher education programmes. These facts coupled with the vast expansion programmes going ahead in British education (by 1964 12 per cent of the population was already engaged in full-time educational work — The Education Industry, by W. K. Richmond) gives the lie to the common conception that the college-educated are just a small elite group.

Reform of primary education, comprehensive schools and continual raising of the school-leaving age are giving to more and more young people the chance to develop that "flexibility of outlook”, that adaptability and open-mindedness which capitalism requires of them. To aid this process there is greater encouragement than ever in the upper school for people to study seemingly incongruous combinations of subjects; the "crank” or "leisure” degrees like psychology, sociology and philosophy are among the most favoured in many universities and colleges; inter-disciplinary' courses arc becoming almost commonplace, and the polytechnics and new Universities have tended to adopt those broad-based, American-style syllabuses in which “educational and occupational flexibility go hand in hand” (Senate Hearings before Clark Subcommittee, p 387).

What so far has been the result of the spread of education and the information explosion in the advanced countries of the world? Have people been generally satisfied with the additional purchasing power that their skilled, more highly remunerative employment has given them? Let us look at the situation in various countries.

In terms of man-hours lost to production, 1970 marked the highest point of working class discontent in Britain since 1926. Yet the panic this has inspired in the present government seems hardly justified when we consider that in America average strike rates are two and a half times as high!

Workers in France, in the first months of 1968, were enjoying the highest standard of living in their history. Then came the shock of the May events. The developments which have taken place in Italy since 1960 have been called the "economic miracle”. Living standards have risen steepily, yet since this date social unrest and strikes have been seen on an unprecedented scale. The same pattern has been discernible in Eastern Europe. The Czechoslovakian crisis, strikes and riots in Poland and dissident movements in Russia all spring readily to mind.

Recent years have also marked the rise, in the West, of strong, hard-bargaining unions and associations of professional workers. Student protest has engulfed all the advanced capitalist world, East and West alike. So-called affluence (i.e. highly sophisticated misery) does not make workers more satisfied with their lot. In a society where men must sell their labour-power for a wage in order to survive, the class war at both ends of the wage scale is as bitter and as real as ever.

Capitalism has given, and is giving, people the weapons to destroy it. At the moment people are thoroughly dissatisfied with all that capitalism involves (unpleasant work, rationing by wages, intolerable social and psychological pressures), but seeing no alternative still continue to support it. Hence, whilst being increasingly aware of the fact that they are deprived, they either limit themselves to demanding a slightly less minute share of the capitalist cake, or their frustrations explode into violence. But neither course of action leads far. Before we can get rid of a system we must understand the nature of it and have another system to put in its place. It is unconvincing to attack capitalism without being able to propose an alternative to it. That alternative, Socialism, is what we propose.

So how are we going to get a majority of people to agree with our arguments? In brief, social forces within capitalism itself are pushing people in that direction. Capitalist education, as one of these, is forced to give workers the mental tools which enable them to see their fundamental predicament. We simply aim to clarify things. We point out how all the things wrong with the world are rooted in the social system people put up with. We explain what Socialism means and how it can be achieved.

When the working class evaluate the Socialist proposal on its merits there will be no bar to the establishment of a world of free access. The understanding process is continuous and, if we exclude distinct possibilities like nuclear war and mass pollution, the continuing development of capitalism with its ever-recurrent problems and crises can only accelerate it. Socialism is not for the distant future. All the material conditions for it exist already. Once the pressures of coping with capitalism make people fully responsive to Socialist ideas, World Socialism will be a certainty.

Howard Moss