More Trouble about the Means Test (1967)

From the August 1967 issue of the Socialist Standard

A “Means Test” is defined by Chambers dictionary as test of private resources determining or limiting claim to a pension or allowance.

Such tests are centuries old. Ever since the time, four or five centuries ago, when governments and local authorities began to take over from religious bodies and private charity the obligation of supporting the destitute, there have always been tests of “Means” or “Needs*'.

It is a perennial problem of capitalism and no matter how many times the relief system has been reformed and given new names no solution has been found.

Even if we leave out of account the fact that workers generally do not consider their wages sufficient to meet their own ideas of reasonable needs, and consider only the question of a bare subsistence, capitalism cannot guarantee that workers will always have it provided. Capitalism cannot guarantee continuous employment and cannot even guarantee that wages will always be sufficient to provide bate subsistence.

So unless the authorities were prepared to let the destitute starve (and put up with consequent unemployed riots and encouragement to theft) they hail to pay out state and local government funds. But they could not let the applicants name their own figure for the money they wanted, nor could they fix their own figure and let everyone have it who applied.

If they had done this it would have acted as an inducement to workers in low paid jobs simply to give them up.

The authorities tried everything from the “whipping of beggars” in Tudor and Elizabethan times, to making them go into the hated workhouses, or work colonies, breaking up families, offering assistance in the form of food, making the unemployed prove they were genuinely seeking work, and applying means tests which subjected the applicants to official enquiry to demonstrate that they really were near destitution.

Then came schemes of compulsory contributions to provide for the payment of specified benefits in sickness, unemployment and old age but although this altered the form of the problem it did not abolish it, did not free the applicant from satisfying conditions laid down in the regulations and did not abolish destitution—there are still about two million people who in the course of a year get public assistance (recently re-named Social Security supplementary benefits).

In an article in the Guardian (2.6.67) Mr. Peter Jenkins states that “seventeen forms of benefit are subject to Means Tests of one form or another.”

No Means Test is popular but the most detested forms of test are those which go beyond the applicant and take into recount the means of other members of the household family.

It was a household means test which was one of the explosive political issues of the nineteen thirties. The National Government which came into office in August 1931 decided to apply to unemployment pay a determination of needs regulation. It was not a new test because it had long existed for applicants for public assistance: what was new was to apply it to the unemployed who had exhausted their right to benefit. The continued payment of benefit was made dependent on the household income and the applicants' savings, ownership of a house or other property.

When the National Government introduced the necessary legislation the section of the Labour Party in opposition condemned it, but as those members of the Labour Party who were in the National Government pointed out, this measure had been approved by a majority of the Cabinet of the Labour Government while it was still in office as part of their extensive economy plans. (Details were published in the Socialist Standard October 1931).

That particular means test as applied to unemployment pay was abolished when Ernest Bevin was Minister of Labour in the war-time National Government in April 1941, but a similar though not so searching test was and still is applied to applicants for Supplementary Pensions. The applicant has to provide information about his own and his wife’s income from all sources, “including such items as pensions from former employers, regular payments from friends and relatives, and the assumed income from capital”, though twenty shillings a week of this “other income” is disregarded in determining the right to and amount of benefit.

Other forms of means test relate to the present government’s schemes for rent rebates and rate rebates. Mr. Richard Crossman in July 1966, at that time Housing Minister, urged local Authorities to put up rent of council houses to a “more realistic” level and to meet the situation of low-income tenants by giving them rebates, subject of course, to evidence of need. He was opposed by objectors who maintained that the authorities “have no right to interfere with individual liberty by prying into tenant’s means to assess a fair rent.” (Daily Mail 9.7.66).

In a typical rent relief scheme, that used by the Greater London Council while the Labour Party still controlled it, the applicant had to give full information about the income of himself and wife from all sources and also the name and age and family relationship of all persons living in the house. But instead of asking for information about the income of those persons the Council added to the estimated total income determining the right to relief an amount of fourteen shillings a week for each person aged 21 or over and seven shillings a week for each person aged 18-20.

Peter Jenkins in the article already referred to, now tells us that long argument had been going on inside the Cabinet about applying a new means test in connection with a proposed increase of family allowances which would raise the allowance for the third and subsequent children by ten shillings a week—he claims that the Ministers were almost equally divided, with only a majority of one against it. “With the Cabinet so astonishingly narrowly divided it is certain that the issue will come up again.”

With unconscious irony he tells that the advocates of the new Means Test “were able to argue that each according to his needs is equally a principle of socialism” — as if that socialist principle can have any possible connection with a device of capitalism to screw down the pittance provided for its victims.

Edgar Hardcastle

Supply and needs in socialism (1984)

From the July 1984 issue of the Socialist Standard

If socialism had to be summed up in a single phrase we could say that it was conscious social control of all aspects of life, including the production and distribution of wealth. This is why Marx once spoke of real history only beginning with socialism, by which he meant that humans had until then been the victims of natural scarcity (low productivity imposing hard labour and material shortage on the bulk of the population) and, under capitalism, of blind economic forces beyond their control; pre-history would end with the end of capitalism as the establishment of socialism would precisely put social life under conscious human control; in socialism the human race would be carrying out their own desires and decisions.

What will give humans this freedom in socialism is the fact that all the Earth's resources. including the means for producing wealth, will have become the common heritage of the whole of humanity. Actually, this is just another way of saying that the world will belong to nobody; there will be neither property nor territorial rights over any part of the globe. Humanity will therefore be free to organise its social life in accordance with its wishes. To do this—to decide on and carry out its wishes—humanity will have to organise itself, inevitably democratically, since if decision-making were left to a permanent minority they would constitute a new owning class.

Socialism will be a society entirely geared to satisfying human needs. What human beings decide they want will be paramount; everything else will be subordinate to this aim. It is difficult for us. living in capitalist society where time-measured cost as reflected in accounting in monetary units is paramount, and where human energies are no more than a costed factor of production. to appreciate how enormous a change this will be. Today time is money and the economic pressure is to do everything as quickly as possible. In socialism not only will there be no money but time will no longer be so important. Men and women will be free to choose to take longer to produce something if, for instance, this slower production method gives the producers more pleasure, is less unpleasant or results in a product that is better for the health and the welfare of human beings.

This latter brings out again the whole point of socialism: to satisfy human wants and needs. In contrast to capitalism, human beings will no longer be the mere bearers of value-producing energy that most of us are today; satisfying their needs will be the sole determinant of production. This too represents an immense change as compared with today, where human needs are only catered for (“satisfied" would be the wrong word) as a means to the end of maintaining people as efficient wealth-producers. Under capitalism the qualitative and quantitative consumption of the majority of the population is restricted to more or less what is needed to maintain them in efficient working order.

Slowly changing wants 
When we have cleared up the mess left by capitalism—which will involve an immense increase in production to eliminate material want and misery throughout the world—socialism can be expected to become a stable, slow-changing society, in terms both of population size and of the wants and consumption habits of its members. This will considerably simplify the task of balancing production and consumption.

As the consumption habits would be stable, or only slowly changing, so would the distribution circuits. Everything would be running more or less smoothly from year to year: adjustments would be relatively easy since it would only be a question of adding something here or subtracting something there in the context of an already functioning system. Production can be expected to platform off (and eventually may even fall since goods will be well-made and so will last longer than today, so needing to be replaced less often). Nevertheless, it is still useful to outline how such a system of ensuring the satisfaction of the material needs of humans might function.

The material needs of human beings boil down basically to food, clothing and shelter. We will begin with food. Here, as with everything else in socialism, humans will have a free choice. Having made this proviso however, it is hard to sec the people of socialist society being satisfied with the Instant this and Quick that that is the staple diet of most people today. In fact most of the food available today in shops and supermarkets is likely to be rejected as substandard. If only for the sake of their health (quite apart from improved taste) people are going to demand more fresh fruit and vegetables and more free-range animal products.

If we imagine people living in much smaller urban communities than today we can also imagine this need being satisfied to the maximum extent possible locally, with each town/country area trying to be as self-sufficient in these products as it can. Some of course will be less successful in this than others, their excess needs having to be satisfied on an inter-regional basis in the same sort of way as we shall see could be applied for certain other consumer goods. As to the distribution of locally-produced food, no doubt the same sort of system could apply as was suggested by pre-industrial socialist writers like Thomas More and Gerrard Winstanley. The produce could simply be taken to stores from which people could take freely what they needed without buying and selling.

With regard to the home, we enter the realm of speculation. Some writers like Cabet and Edward Bellamy have envisaged preparing—and eating— meals, washing clothes, cleaning and the like being done communally, pointing out the waste involved in each household preparing its own meals and doing its own washing. We have already seen that saving time won’t be a consideration in socialism if it conflicts with satisfying human needs in the best way possible, so this is not a very strong argument. But we can certainly expect that socialism, being a society which will give free range to the nature of humans as social beings, will see needs being satisfied in common much more than is the case today under capitalism, which has made the nuclear family the basic competitive unit in the rat-race society that it is. Anyway this is a question that can be left open without in any way affecting the case for socialism.

But, whatever the choice, houses will be built to conform to it and. in any event, whether cooking or washing are done individually or communally, the “consumer durables" required will be technically similar. The houses and communal buildings would be built locally with perhaps the participation of their future inhabitants, but there is no particular reason for every town/country area to be self-sufficient in the production of cookers, washing machines, fridges, and so on. This is something that could enter into a more complex distribution system than that which we have mentioned for locally-produced food products.

A question of stock control

The techniques for estimating wants exist already under capitalism, even though they are distorted to gauge not real wants but only profitable markets. But whatever the subject being investigated—real needs in socialism, restricted market demand in capitalism—the techniques remain the same: representative sample surveys as well as data on what has happened in the past, changing age-patterns, and so on. which are fed into computers.

The other aspect—ensuring that what people want is always available when and where they want it—is more complicated but once again this has been considerably eased by the coming of computers which are ideally suited for organising the dispatching of goods and stock control. The system we are about to describe is one that could be used to ensure that town/country communities will always be adequately supplied with what their inhabitants are likely to want in terms of non-locally produced food, materials to make shoes and clothes, consumer durables, furniture and other items of everyday use.

We will imagine all these goods to be available—for taking freely as and when needed of course—in stores which will be connected to a central computer. This will allow the dispatching centre (where we will assume this computer to be sited) to know at any time the exact state of the stock in all of the stores it covers. The computer would be programmed to indicate when the stock of any particular item fell below a certain level and to order further supplies of the item in question to be sent to the store in question. This could be co-ordinated, again by the computer, with other orders from other stores so as to work out a full load and itinerary for a lorry or train leaving the dispatching centre.

Such a system is not something that socialists have dreamed up. It already exists and is already used by some supermarket chains, as anyone in the trade will know and as is explained in an article on the mechanisation of work by Martin Ernst in the September 1982 special issue of the Scientific American. You may have noticed on many of the things you buy in supermarkets and grocery stores a space filled with thick and thin lines. These “bar codes", which are read by an electronic eye at the same time as you pass the cash desk, allow the good in question to be identified as well as who supplies it. The only difference between what happens now and what could happen in socialism would be that in socialism stocks would run down through people taking according to need, while under capitalism they run down through people buying according to what they can afford. Even under capitalism this computerised system is essentially a system of stock control (even if inevitably it is also used for identifying the price of a good and for profit calculation purposes).

So far we have only dealt with what might be called the retail side of the question. but it is possible to imagine the same sort of computerised system working at the "wholesale" level too, with the various dispatching centres we have mentioned in their turn being connected with the factories where the goods they supply are produced. Then we can imagine these factories being connected with the suppliers of their raw materials, and so on. Such a computer network. when perfected, could provide a system of adjusting supply to demand just as flexible as the advantages claimed for the free market by the defenders of capitalism, only the “demand” in question would be real human needs and not artificially restricted market demand.

It is perhaps worth pointing out that we are not envisaging the level of stocks of consumer goods throughout the whole world being controlled by a single huge computer, the sort of “Brain" that some science-fiction writers have thought up. Clearly there is no need for those concerned with, say, world copper production to know the state of the stock of copper wire in every distribution centre in the world! What we have in mind is a sort of hierarchy of computer networks going from those controlling stocks in the local distribution centres in a particular region through those controlling stocks in “wholesale" distribution centres right up to those controlling the production of raw- materials on the world scale.

Of course it would still be possible to organise the adjustment of supply to real needs even without today's electronic computers but this would be much more time-consuming. Most stock control—for that is what we are talking about rather than buying and selling—under capitalism is still not computerised and yet still works more or less efficiently as a means of adjusting supply to market demand. It is just that computers simplify the task immensely. This in fact is yet another example of every advance in science and technology making socialism ever more practicable.

We have been talking about the system once it has been set up and is in operation. Once this has been done it will function fairly smoothly, especially as demand is likely to be fairly stable. The big problem will be setting up the system, but the technology and human skills to do this already exist. This will be a challenge which we are sure computer workers, once socialism has been established, will be only too keen to take up with enthusiasm. Most of them would be using their skills to a socially useful end for the first time. Today, most computers are used in connection with money, while advances in telecommunications are prostituted either to relay share or commodity prices to stock exchanges and brokers throughout the world or for military purposes. The scope for combining computers and telecommunications in the service of satisfying human needs will be immense in socialism.

Pre-computer socialists like Cabet, Marx and Bellamy (and indeed earlier members of the Socialist Party) got it basically right when they saw the problem of adjusting supply to needs in a moneyless society as being essentially one of surveying and deciding wants and then organising the production and distribution of wealth accordingly. They realised that this was essentially a statistical exercise and one that could be done much more easily in a moneyless society than in an exchange economy like capitalism where, quite apart from the artificial restrictions imposed on the consumption of the majority, adjusting supply and demand is very much a hit-and-miss affair. Mistakes could occur in socialism but they would not have the disastrous effects they do under capitalism. As Marx pointed out, socialist society could deliberately choose to overproduce a little to constitute a reserve precisely to cater for underestimates (and natural disasters), and if demand was overestimated, then those producing the good in over-supply could . . . simply take a holiday and do something else for a while.

What we have described here is not something completely new thought up by socialists. It is something which already exists and which we are suggesting could be extended and adapted to serve human needs, instead of being prostituted in the service of profit and capital accumulation. After all, as we have always said, the material basis for socialism (of which the mechanism for adjusting supply to needs is one aspect) already exists, and has existed for some time; all that is lacking is the will to change society so as to be able to take full advantage of it.

Adam Buick

Economics is bunk (1993)

From the July 1993 issue of the Socialist Standard

Want to know how to pass the GCSE Economics exam? Then this is what you must do. Ignore the facts, blinker your mind and repeat the following parrot-fashion: all resources are scarce and always will be; human wants are unlimited and so can never be satisfied; without a class of entrepreneurs nothing can be produced.

In case you think we might be exaggerating, have a look at any course textbook. Here, for instance, is what I. L. Hobday lays down in the first lesson of his GCSE Economics in the Pan series "The Complete Guide to GCSE Exam Success":

  Unlimited consumer wants are greater than the quantity of factors of production (land, labour, capital and enterprise) available to produce goods and services.

He goes on:

   Consumer wants are unlimited. This means that consumers (i.e. anybody who buys or purchases) want food, shelter, clothes, etc. These wants are unending. For instance a consumer may want food, then more food and better food. Goods and services cannot, however, be produced in unending amounts because the factors of production (or resources) are themselves limited in supply. Therefore goods and services are scarce (which means limited in supply).

Whatever you do, don't let common sense interfere at this point and make you challenge the unsupported claim that "consumer wants are unlimited". Unlimited? This would mean that each and every one of us wants to consume the whole universe, a proposition that would be well-placed to win a prize in any competition for absurd statements.

Fake scarcity
The truth is, of course, that human wants are not "unlimited". "unending" or "insatiable". In practice what we want is relatively limited and quite reasonable. We want decent food, clothes, housing, household goods, travel facilities, health care and entertainment. What most people want is no doubt greater than what we are allowed to consume today as a result of the restrictions imposed by the size of our wage packets or salary cheques, but this is not at all the same as saying that our wants are unlimited.

The same goes for the claim that resources are scarce. This is just as absurd. Of course if wants really were unlimited then resources will always be insufficient to satisfy them—by definition. But this tells us nothing about the real world, about whether or not resources are in practice sufficient to satisfy people's actual—and relatively limited— wants. 

All the studies that have been done regarding people’s food needs have shown that resources are more than enough to meet them. And the same result can be expected to be reached if studies were done about the amount of clothes, housing, etc that people wanted. In any event, it is not good enough to lay down as a dogma—as the GCSE course does—that resources aren't sufficient for this. Facts to back up such a claim ought to be produced, but none of the economics textbooks ever do this.

And don’t challenge either the peculiar definition of "scarcity" as meaning what is "limited in supply”. Most of the resources needed to satisfy our wants, except perhaps the air we breathe and the rays of the sun, are limited in supply in an absolute sense, but that's not the same as saying that they are "scarce”, i.e. in short supply.

Just the opposite is the case. In relation to people's actual reasonable and limited wants, most resources are not in short supply, but are or could soon be made available in adequate quantities, in fact in more than adequate quantities. But. if you want to pass your GCSE Economics, you mustn’t mention this.

False factor
Pan Books' “Complete Guide to GCSE Exam Success" also tells you want to write about the "factors of production". Basically—we’re talking about the real situation now. not what you have to repeat to pass—for production to take place two “factors” are necessary: materials that originally came from Nature (“Land”) and the mental and physical energies and skills of human beings (“Labour”). The combination of these two is the source of all existing (and past) wealth. It is legitimate to distinguish a third “factor”—human-made instruments of production, which conventional Economics persists in calling, misleadingly, “Capital”—but only as long as it is recognised that this is derived, and can only be derived, from a combination of the first two.

But to pass your GCSE Economics you have to agree to the invention of a fourth “factor” called "Entreprise”. This, you must assert, is the key factor without which the others are useless. You must copy Hobday and write:

   Without the entrepreneur the other resources have no economic importance—they need to be brought together and organized for production.

If you refuse to sing this hymn of praise to the captains of industry and business men and women, then you can say goodbye to passing your GCSE exam. The last thing you must do is to ask whether, perhaps. Labour (which Hobday admits to be “the mental and physical human effort involved in the production process”) could not organise production on its own, without the entrepreneur.

Because if you did, you might come up with the common sense answer that, even today under the profit system, the actual work of production, from start to finish and from top to bottom, is carried out by workers applying their mental and physical energies to materials that originally came from Nature (either directly or as instruments of production fashioned from Nature by earlier generations of workers). All an entrepreneur does is look out for opportunities to make a profit and line their own pockets out of the wealth produced by Labour.

So, if you rteed to pass the GCSE Economics exam to have a chance of getting a better job. our advice is: write down the crap the examiners want to read—but don't believe a word of it.

Adam Buick

Artificial scarcity (1998)

From the April 1998 issue of the Socialist Standard

Technological capacity to produce enough to satisfy everyone's needs already exists globally and has done so for many decades. Yet needs continue to remain unmet on a massive scale. Why? Quite simply because scarcity is a functional requirement of capitalism itself.

Production today is not primarily geared to satisfy human needs but "effective demand"--when "consumers" are able to buy goods at a price which will enable enterprises producing them to realise a profit. If what people can afford falls short of what they need, increasing output to satisfy the latter would cause prices to fall--to the detriment of profit. So the need for profit conflicts with the satisfaction of human needs.

Profit is not essentially a measure of technical efficiency. It is sometimes argued that the market's "hidden hand" guides enterprises towards the most efficient allocation of resources by bankrupting those failing to respond appropriately to its price signals. According to this argument, resources are inherently scarce and the market provides the best, if not the only, available mechanism for ensuring they are not wasted (which would aggravate scarcity). But the yardstick of "efficiency" used here is not something external to capitalism but intrinsic to it. An enterprise is judged to be "efficient" to the extent that it is profitable.

That means its revenue exceeds its cost. However, this can create the illusion that profits are made in the market--by raising prices to more than cover costs. But capitalists cannot just arbitrarily raise their prices--that could mean losing business to their competitors. In any case, one enterprise's price increase would constitute another's cost increase (insofar as enterprises supply each other with the inputs they require), with the resulting reciprocal losses and gains balancing each other in the long run.

In fact, profits are made in the sphere of production (but only "realised" in the market). The source of all wealth is human labour applied to natural resources. Those who apply their labour to create this wealth today (the workers) are employed to do so by the owners of the means of wealth production (the capitalists). The value of the wealth workers create necessarily exceeds the value of their working abilities for which they are paid a wage (or salary)--the difference between these two values being "surplus value", the source of the capitalists' profit.

So profit depends on restricting workers' consumption to what is needed to develop and maintain their working abilities at the level required. More than that only adds to the wages bill without producing a commensurate increase in productivity. But what is so vital about profit that makes this necessary? Not only does it afford capitalists a lavish lifestyle; more importantly, it is the source of their capital. The more capital they can accumulate out of the profits accruing to them the more effectively can they compete--by investing in more productive technologies to undercut their competitors--and thus claim a larger share of the market for themselves. If they did not do this then their competitors would, and could knock them out of business.

So economic competition between enterprises fuels the drive towards capital accumulation. This in turn necessitates profit maximisation which expresses itself as a continuous downward pressure on wages (reinforced by competition between workers on the labour market), insofar as these constitute costs which subtract from the capitalists' profit. This downward pressure on wages was once widely thought by Leftists to lead to a chronic and ever-deepening depression. According to this theory of "underconsumption", the development of the productive forces would result in increasing quantities of consumer goods swamping the market which workers would be unable to buy back, thus precipitating capitalism's collapse.

However, any decline in the workers' share of total wealth must represent an increase in the share appropriated by the capitalists and hence also their potential demand for consumer goods. It might be argued that rather than increase their consumption of consumer goods the capitalists could divert more of their wealth into investment instead, thereby enhancing the productive capacity of industry. But since such investment will only proceed when there is the expectation of profit this presupposes the existence of consumer markets capable of absorbing the potential increase in output.

Nevertheless, while growth in productive capacity and market demands tend to balance out in the long run their normal state is one of "disequilibrium". This generates a continuous process of mutual adjustment which takes the form of the capitalist "trade cycle". In the run-up to a boom enterprises expand their productive capacity to meet the surge in market demand. However, blind competition between them leads to overproduction in some sectors of the economy at first, resulting in falling prices and a squeeze on profits. Workers are then laid off in these sectors thereby reducing their demand for the goods provided by other sectors. A ripple effect is thus created which takes its toll on an expanding range of industries resulting in a generalised recession which only comes to an end when the conditions for profitable production are restored. As Marx put it: "the last cause of all real crises always remains the poverty and restricted consumption of the masses as compared to the tendency of capitalist production to develop the productive forces in such a way that only the absolute power of consumption of the entire society would be their limit" (Capital III, p.30).

Artificial needs

As well as desiring things we need, we are also encouraged to desire things that we do not need. Indeed, insofar as there is theoretically no limit to what we are capable of desiring this allows pro-capitalist economists to argue that scarcity is the "condition of the world". To question why we should desire such things over and above what we need is to encroach on territory that falls beyond the scope of traditional economics; it is thus deemed inadmissible from the blinkered perspective of the economists themselves.

Not that that prevents them from adopting the assumption that human beings are fundamentally driven by insatiable desires. In fact, the attempt to universalise that assumption by grounding it in the very nature of human beings was, as Marshall Sahlins argues in his Stone Age Economics, the ideological by-product of an emerging bourgeois society. Not coincidentally, it went hand-in-hand with the attempt to downgrade and dismiss earlier cultures as "primitive" and "backward" for not exhibiting the insatiable desires characteristic of bourgeois society itself. As Sahlins points out, the bourgeois axiom of scarce resources and unlimited wants can be neatly reversed in the case of our hunter-gatherer forbears for whom an excess of possessions was not merely disapproved of but viewed as a positive encumbrance to their nomadic way of life.

It was with the appearance of private property, particularly in its individualistic capitalist form, that the ideology of scarcity took root. In his perceptive book To Have or To Be, Erich Fromm notes that private property derives from the Latin word privare meaning "to deprive of" because "the person or persons who own it are its sole masters, with full powers to deprive others of its use or enjoyment". It is such deprivation that engenders the pathological desire to possess. For within this individualistic world-view it is through one's possessions that one attains the power and freedom to be oneself; one's sense of self-identity and self-worth--in short, one's social status--is tied up with, and expressed through, one's possessions. This is what Fromm means by a "having" mode of existence as opposed to a "being" mode.

Crudely speaking, this means that the better-off one is materially speaking the more status one accrues. However, since it is not the absolute amount of one's material possessions as such that determines one's position in this status hierarchy but rather what one has compared with what others have, it follows that economic inequality is a basic precondition for such a system of status differentiation to effectively operate. In this respect, capitalism not only provides the yardstick by which this concept of status is measured but also works to ensure an unequal distribution of wealth, enabling such a system to operate.

So it does not matter how modest one's real needs may be or how easily they may be met; capitalism's "consumer culture" leads one to want more than one may materially need since what the individual desires is to enhance his or her status within this culture of consumerism and this is dependent upon acquiring more than others have got. But since others desire the same thing, the economic inequality inherent in a system of competitive capitalism must inevitably generate a pervasive sense of relative deprivation.

What this amounts to is a kind of institutionalised envy. This is ironic inasmuch as socialists are often accused of being motivated by the "politics of envy". Nothing could be further from the truth. In fact, such envy is merely the flip side of the same coin as greed. And it is the idea of greed which underwrites the myth of scarcity which, in turn, serves to justify the existence of a market which socialists oppose.

Socially useless production

Socially useless production constitutes a large and growing proportion of economic activity within capitalism and, as such, contributes significantly to the perpetuation of artificial scarcity--in this case from the standpoint of supply rather than demand.

Of course, capitalism does not and cannot distinguish between socially useful and socially useless production. The reason for this is that both are functionally necessary for the realisation of profit. So for anyone not looking beyond the parameters of capitalism such a distinction will remain obscured.

If socially useful production comprises any form of activity that goes to satisfy real human needs, socially useless production represents any activity that does not satisfy such needs. The needs that the latter satisfies are the system's needs. These include not only status needs but operational needs arising from how the system operates. There is a tendency for capitalism to develop towards ever-increasing complexity with the consequence that over time its operational needs tend to soak up ever-larger quantities of resources and human labour. This is exemplified by the growth of money-based activities to facilitate market transactions (from banking to retailing), reactive/remedial activities to cope with the social problems thrown up by capitalism (from social workers to trade unions) and coercive activities to protect or promote the interests of capital (from weapons research to security firms).

Estimates vary as the proportion of total labour and resources devoted to systemic needs but there can be little doubt that, particularly in the advanced capitalist economies, well over half the total labour force is involved in one or other form of socially useless production. This represents a massive waste of human effort and resources which, if redirected towards socially useful production, could effectively eliminate scarcity as far as the satisfaction of real needs is concerned. To eliminate scarcity, however, requires a fundamental switch from production for profit to production for use--from capitalism to socialism.

Robin Cox