The Great Crash of 1929 (1969)

From the October 1969 issue of the Socialist Standard

The events of October 1929 which have become known as the Great Crash have been written not only into capitalism’s history but also into the system’s mythology. There are still plenty of people living who remember it, who recall with bitterness the seemingly endless unemployment, the contemptuous clerks at the Labour Exchange, die indignities of the Means Test. Many political prejudices were set solid in those dark days, forty years ago.

The economists also remember and promise us that 1929 will never happen again—which might have more force, were it not for the fact that in 1929 the economists were confident that the Crash could not happen in the first place. The promise, in any case, is always conditional on our doing as the economists say, with 1929 held over our heads much as Napoleon held the threat of Jones' return over the animals in Animal Farm. This, for example, was Harold Wilson’s warning to the 1966 TUC about what would follow a rejection of the government’s policy of wage restraint:

  . . . one false, careless, regardless step . . . could push the world into conditions not unlike those of the early Thirties.

Wilson is here making the familiar claim that the economy is now under control, even if sometimes it needs drastic measures like wage freezes and devaluations to remind it of the fact. And behind this lurks the notion that the economists of capitalism have learnt something from the Great Crash which they will never forget.

As 1929 started, the world was not entirely empty of optimism. Since the last great depression of the 1890’s there had been many developments in fields like electricity, the motor car and telecommunications and these were widely assumed to be bringing in their train greater freedom and equality. It was true that in Britain there was a chronic unemployment problem but the United States was in the midst of a prolonged stock exchange boom which convinced millions of people that mass production, credit trading and private enterprise were among the best things ever invented by man.

At the year’s opening the Conservatives in Britain were looking back with satisfaction on the work Parliament had just finished on amendments to the Book of Common Prayer; if there was an unemployment problem, they were confident they had dealt with it in their Derating Bill and Tory politicians toured the country telling everyone that prosperity was on the doorstep. This hilarious tone was kept up by Stanley Baldwin during the general election that year, when he managed to forget that basic industries like coal, steel and shipbuilding were depressed and pointed joyfully to the unmistakable signs of recovery to be found in the export of Cornish broccoli to Europe. Perhaps it is not surprising that the Tories lost the election.

The unpalatable fact was that Britain’s economy had been in decline for something like sixty years and in particular had emerged from the war to find the tendencies which had previously undermined British dominance — foreign competition, tariff barriers and the growth of home industries in former markets abroad-—were all accentuated. Soon after 1918 there was a surprise boom, largely due to the replenishment of war-depleted stocks. Prices shot up to impossible heights and, despite the demobilisation of 4 million servicemen, there was virtually full employment. But as raw materials which had been held up by the lack of shipping began to come onto the market the boom collapsed. By early 1922 prices had been halved; in 1921 unemployment exceeded 2½ million.

The slow recovery from this recession was probably due to the British government’s decision, in 1925, to return to the Gold Standard. The government were aware of the possible effects of this, but they found themselves in something of a cleft stick, having to choose between slowing down a possible recovery and risking contamination by the inflation which was destroying so many European currencies. (At the end of that inflation, prices in Poland had risen 2½ million times their pre-war level; in Russia 4,000 million times; in Germany one million million times.)

In America, where the Great Crash was first heard to rumble, things were rather different. The American capitalist class had had a lot to win in the 1914/18 war and came out of the peace talks as an exceedingly strong power. Their exports were increasing in trades which were expanding—in contrast to those of Britain, Which made most ground in declining trades. America suffered a few short recessions during 1920/21, 1924 and 1927 but always recovery followed quickly and taken as a whole the period from 1922 to 1929 was one continuous boom.

These conditions were of course registered on Wall Street, where the New York Times index of 25 industrial stocks rose in a smooth curve from 110 in early 1924 to 338 in January 1929. Just before the Crash, in September, it reached 452. This was the sort of evidence which persuaded many people, anxious to make their own paper fortune, that eternal prosperity had arrived. The monetary authorities seemed to be alone in their concern at the hectic activity on the stock exchanges —on one day just before the Crash over 12 million shares were traded and during the period 1927 to 1929 the bank borrowings of stock brokers rose from $3,500 million to $8,500 million—and when the slide started in October they welcomed it, in mistake for a minor adjustment which would quickly be followed by another bout of expansion.

Early in the New Year there was indeed a slight recovery and the experts announced the recession’s end. But then agricultural and raw material prices nosedived and this was followed by three waves of bank failures between the end of 1930 to mid 1932 which destroyed deposits, caused a panic-stricken contraction of bank loans and finally brought paralysis in the winter of 1932/3.

The bank failures revealed a new and poignant aspect of the Crash. Now it was not only the unemployed industrial and agricultural workers who were queueing and begging; they were joined by small businessmen, shopkeepers and stockholders who had seen their life savings disappear and who, when ruin stared them in the face, sometimes chose to end it all with a bullet or a jump from an apartment window.

The American government, following the customary policy of treating symptoms rather than deal with causes, tried to force prices up by cutting back production and restricting competition. In many cases this policy was superfluous; producers who were faced with a glutted market needed no official prompting to destroy food, and industrialists who found that they could not sell their goods had no alternative to closing their works. From the point of view of capitalism, it was all very logical but it meant that the world was presented, in what was supposed to be a great age of freedom and prosperity, with the spectacle of millions of underfed people while wheat was being burned; of men searching desperately for employment while factories were shut, while the winding wheels stayed still at the pit shafts and the great cranes hung silent and motionless in the almost tangible gloom of the shipyards.

Yet even these drastic and inhumane measures did not work. Tom Johnston, who was one of the Labour ministers given the job of ending unemployment in Britain, spoke about them with grim realism:

  It is in vain that the United States keeps 250 million bushels of wheat, or contact wheat, off the market in an endeavour, by a limitation of supplies, to peg or to stabilise prices. Only the other day wheat sold in Liverpool at a lower price than it has been sold since the days of Charles II. lower than it had been for two and a half centuries. (House of Commons. April 16 1931).

The Great Crash, and the slump which followed, have been subjected to innumerable autopsies and inquests. Perhaps the most familiar has been the theory of overproduction, that the world had simply made much more than it needed. At the time, some experts believed that the developing productive techniques were held back from exerting their full effect by the 1914/18 war, and afterwards made themselves felt in a more concentrated manner. As a result of these developments, productivity increased faster than real wages—one estimate for new manufacturing industries was three times as fast—which led to a surplus of goods on the market with no wages to buy them. (It is worth commenting that nowadays the explanation for economic crises is exactly the opposite — real wages increasing faster than productivity.)

Undeniable as it is that people without money cannot buy anything, the overproduction theory does not explain the fact that the “surpluses” existed while people were literally starving and only too anxious to consume more. It is a theory which only meddles with the symptoms of the crisis and does not touch the cause, nor the stupidity and inhumanity of it.

Then there were the financial theories, which blamed the Crash onto the wild antics on Wall Street and the subsequent slump onto a loss of confidence in investing in production, public works and so on. These ideas cannot tell us why it affected so many countries, whether they had had a stock exchange spree or not; they do not explain why an investment flood should so mechanically bring an investment drought, nor why both these opposite conditions should be blamed for having a similar effect. It is true that capitalism's financial machinery, which is supposed to be such a model of efficiency and such an aid to production can often aggravate a recession. But it cannot produce one—at the most a stock exchange, like a barometer, registers conditions but does not alter them.

What the Great Crash did illuminate was the impossible anarchy of capitalism, the basic contradiction in a system where wealth is socially produced but privately owned. The Thirties might have been years of productive advance but they turned out to be a decade of collapse and stagnation, when capitalism was in the throes of a crisis which hit all states, whatever surface differences there were between their political and economic organisations and whatever remedies they tried.

The political results of the Crash were varied. In some countries the working class opted for what they thought was change; in others they turned for assurance to the more traditional parties. In America, Roosevelt defeated Hoover in the 1932 election by the staggering margin of 472 electoral college votes to 59 and the Democrats won large majorities in both House of Congress. Roosevelt’s New Deal was later given much of the credit for the end of the slump but in fact it was a matter of luck. He had campaigned on a promise to cut Federal spending by 25 per cent and to balance the Budget. But he was as impotent to control events as anyone else and when a policy of deficit financing was forced upon him this happened to coincide with the beginnings of the recovery.

In the same way, the Nazis were lucky in Germany. The recovery started as they came to power, allowing them to spend on armaments and communications and this was enough to convince many people that Hitler also had a magic formula, which included replacing parliamentary democracy with a “strong man” dictatorship and crushing the trade unions.

In Britain the workers took shelter with the established parties. One of the first acts of the 1931 National coalition was to cut unemployment pay but this did not prevent the working class gratefully voting for them in 1935, running up big Tory votes in industrial centres like Manchester, Liverpool, Newcastle and Sheffield.

The Great Crash, then, did nothing to undermine capitalism and it did not. as many left-wingers expected, cause the system to collapse. It merely contributed another chapter to capitalism’s mythology, in which one set of politicians were stubbornly blind to remedies which were obvious to another. And this leads on to the other myth—that the new enlightened experts have learned how to control the system and we should all be grateful to them and if we’re not—why, then, we will have Jones back and 1929 will happen all over again.

As if those were the only two choices.

Ivan

[In a future issue we shall be serialising an abridged version of our pamphlet "Why Capitalism Will Not Collapse." This pamphlet, which w'as published in February 1932, examines the after-effects ,of the Great Crash and showed what influence they had on capitalism,]

Letters: More on Squatting (1969)

Letters to the Editors from the October 1969 issue of the Socialist Standard

My letter, (July Socialist Standard), was written in order to find out whether you have a coherent party line on reformism. Your reply suggests that you have not, and reveals a deep confusion as to how you think a worker should behave under capitalism.

You say that you “support the efforts of workers to improve their housing conditions under capitalism—even by squatting”, and yet you are “opposed to all reformist movements.” Your reason for thinking there is no inconsistency in this position is that "squatting is no more a reform than stealing.”

But it is. For example, although the East London Squatters encourage homeless people to occupy empty dwellings they do this as a means to the reformist end of persuading local authorities to change their housing policy. It just so happens that there you have a reformist movement which uses direct action instead of the orthodox political channels. So if you support people squatting then you support their engaging in reformist activities. This, I agree, is not the same as supporting a reformist movement, but since when did the SPGB support the workers in being reformists? To put your dilemma another way, if you support people in squatting but are opposed to all reformist movements would you allow a member of the East London Squatters to join your party?

You ought to, of course. For what is the difference between getting what you can out of capitalism by joining a trade union and doing the same by joining the Squatters or a Tenants' Association? The only difference I can think of is that possibly Marx would have approved of the first of these but not the other two. But I am sure you will agree as scientific socialists that this fact on its own is worthless (After all, Marx approved of support for bourgeois revolutions).

To sum up: it would be convenient if you could simply register opposition to all attempts at reform, right across the board. But apart from the sheer inhumanity of such a position, you are precluded from adopting it because of your views on trade unions and the vote. To draw the line here looks suspiciously arbitrary and anyway from what you say about squatting it looks as if you don’t draw it here. So where do you draw it? You think that workers should get what they can out of capitalism. So suppose a man could do this by joining the British Humanist Association (because this would give him contacts for a job offering more pay for less labour-power). You would then, prevent him from adopting it because of your views on something of which you approve.

W. Warwick, 

Oxford.

Sir,

I am intrigued by your reasoning in your reply to Mr. Warwick. I pass over the use of somewhat ill-chosen emotive terms to compare squatting with stealing, for there is no certainty that stealing will lead to greater equality of wealth, and in most workers’ minds the term suggests the bank robber carrying off not the bank’s wealth but the workers’ savings.

When you say that in supporting squatting you are not supporting reforms — is this because you give generalised support, but do not intend to take part in any attempt to help squatters do the squatting?As besides the workers involved a number of politicoes are there to help, redecorate the house, hand out leaflets explaining the case, print those leaflets, argue with and resist bailiffs and police and so forth. The family who squat, are certainly engaged in a day to day struggle to defend their living conditions, but what of their sympathisers and supporters?

In Ilford as in many other instances part of the support has meant that leaflets have been distributed explaining that as an immediate possibility such and such houses are empty, will be empty for some years as the council has not yet permission to undertake the scheme under which they are to be pulled down and does not anyway intend to tackle this part of Ilford until 76 and so on . . . Arguments are put that lack of housing is the product of the profit motive and not any intrinsic impossibility as to building; but specific demands are made for the here and now.

Some years back one of your members in an article condemning anarchists argued that syndicalism was reformist—reformism by blows, but reformism nevertheless — this would appear to be the case of squatting; I would prefer to use the phrase gradualist revolution, but if the argument is true of the one then it is true of both. 

Laurens Otter, 

Thornton Heath

Reply:

Our coherent policy on reforms and reformism is set out briefly here:

1. We are opposed to reformism, or the futile policy of trying to make capitalism work for the good of all.
2. We are opposed to political groups which pursue reformist policies.
3. We are not opposed to all reforms of capitalism.
4. We do not advocate or propose reforms. .
5. Reforms will be offered by capitalist governments when the Socialist Party grows stronger.
6. We urge workers to resist the downward pressures capitalism always exerts on their living standards.

Since it is this last point which worries Mr. Warwick let us go into it further. We appreciate that as long as workers are not socialists, this resistance will often be carried on in a disorganised and ineffective way usually involving support for reformist policies and parties. As long as socialist numbers are small (as now) there is little we can do to remedy this save urging workers to recognise the futility of reformism and to become socialists and wage the class struggle in an organised and conscious way.

There is a difference, which we are sure Mr. Warwick can see, between giving support to the general aim of working class resistance to capitalism and giving support to any and every specific method a non-socialist working class might use. We only endorse those methods which we consider to be in the interests of the working class, e.g., some aspects of trade unionism. We oppose those methods which we consider do not measure up to this standard, e.g., reformism.

Now, where does squatting come in? Obviously we should have made it more clear what we meant by ’’squatting” when we said it was the kind of action a worker could take to improve his housing conditions under capitalism.

Originally the word meant to occupy land without title and has come to refer also to occupying empty houses. When we referred to ’’squatting” in the April Socialist Standard and in our July reply to Mr. Warwick we meant the simple act of a homeless family moving into an empty house, i.e., the act of an individual, family trying to get better housing. We are not opposed to, and will not criticise, workers for doing this. We did emphasise also that this was not the way to solve or even palliate the working class housing problem.

However, it is true that ’’squatting” also has a broader meaning: the sort of policy outlined by Mr. Otter with the aim, as Mr. Warwick says, of ’’persuading local authorities to change their housing policy”. This we are opposed to and to organisations like the “East London Squatters” whose reformist policy Mr. Otter was outlining.

Mr. Warwick is obviously unaware that SPGB members are in tenants associations, student unions, parent-teacher groups as well as in trade unions. This is not part of their Party activity but part of their activity as workers, who are tenants or students or parents and who are trying to resist capitalist pressure. This has long been our attitude. We refer Mr. Warwick to the Socialist Standard of January 1932 where a correspondent was told that “members of the SPGB are permitted to belong to certain of the organisations of the unemployed”. The emphasis was put on certain because some of these and other organisations are merely fronts for reformist groups. We would say this is true for the various so-called Squatters campaigns which serve the ulterior motives of assorted anarchist and trotskyist groups. Obviously an SPGB member could not join an organisation of this type.

Our policy on trade unions has been worked out in the light of modern industrial and political conditions. While we recognise that the socialist movement owes a great debt to Marx who first put its theory onto a scientific basis, we have registered our disagreement with the attitude he took up on a number of points (war, nationalism and even reforms).

Finally, we only drew a parallel between squatting and stealing to show that we were not worried that squatting was illegal. The law only exists to protect private property and who are we to respect it?

Editorial Committee

The Failure of Civil Rights (1969)

From the October 1969 issue of the Socialist Standard

Report from Belfast

Few people with an ear to the ground in Northern Ireland could have escaped the growing evidence of murder, well organised and equipped, lingering in the political shadows. Yet when the murder guns added their fury to the flying stones, bottles and petrol bombs during the mid-August days of terror, most people were struck with a condition of profound shock beyond the limits of anything they had previously experienced.

It was not simply the fact that eight people had died and hundreds of others had been injured. Rather was it the realisation that the agents of death, people consciously organised to extend the more-or-less usual stone-throwing into an orgy of killing, were so many. Even more were people stunned by the absolute assault on their illusion of physical security; huge buildings and rows of working class houses burned fiercely, often without the attendance of a single fireman and the cherished notion of the ubiquitous power of ‘law and order', whether hated or admired, was dispelled — for its admirers by its impotency and for its haters, by identification with the mob.

In a violent society eight human lives are but a week-end road accident statistic and people in the familiar role of fleeing refugees are constant T.V. fare that merely plucks the conscience to offhanded sympathy. But the dead were not Jews or Arabs; the queues of terrified refugees, whose homes had provided illumination for the carnage, were not Vietnamese, Biafrans or any of those 'foreigners’ usually engaged in the practice. They were Belfast people: people who spoke as we do . . . walked the same streets . . .  knew the same problems.

The strife was confined to working class areas. The back-to-back houses of Derry's Bogside—among the most miserable slums in Europe — Belfast’s Falls Road, Shankill Road and Ardoyne area. Those who died, those who were wounded, those who were burned or terrified out of their homes were members of the working class. It was members of the working class, too, that did the killing, wounding and burning. No upper class casualties were reported.

The Catholic worker puts the blame on the Protestant worker and the police. The Protestant worker puts the blame on the Catholic worker. The politicians, too, viciously and vigorously, reflect the bitterness and prejudice of their supporters: each blames the 'other side' as well as the police, B Specials, Paisleyites and the I.R.A.—some of the more fanciful even advance the notion of an international anarchist or communist conspiracy.

It is pointless here to deal with the accusations and counter-accusations that have mostly been tailored to the prejudices of the people making them. As Socialists, we are less concerned with the battles than we are with the material conditions that brought them about. By this we do not mean the various provocations, demonstrations, government bans, lunatic clergymen, police viciousness that go to make up the events of Northern Ireland’s recent history. We don’t so much want to know who pulled the trigger—rather do we wish to examine the reason for loading the gun.

That reason is to be found in the facts of working class life in Northern Ireland today. It is to be found in unemployment, in slums, in homelessness and all the other poverty features of working class life. These are the things which breed the notion and the reality of discrimination, that create divisions within communities, that determine the economic priorities that go to make up the stock-in-trade of all the politicians and political parties claiming ability to run an insane economic system in a sane way.

It is the failure of the politicians and their parties that drives the workers in despair to street protests and demonstrations. But the people who organise and partake in these demonstrations are as ignorant of the economic facts of capitalism as the politicians whose failure creates the desire for direct action. What they fail to understand is that the system we live under, the system which they vote for at elections is by its very nature incapable of meeting working class needs; that poverty, slums and unemployment, are a natural and permanent feature of the capitalist scheme of things; that the politicians, even if they are eager to, simply cannot solve these problems. Their job is to administer the system of capitalism, to legislate conditions for the smoothest possible functioning of the system and to ensure that the rights of property are preserved and protected. The political complexion of the party running the system is irrelevant; while society is organised on the basis of profit rather than human needs, the system dictates to the party in power.

Ironically, the protesters and demonstrators see the problems against which they militate in the same terms as the politicians who run capitalism. Their '‘demands” are always “realistically” anchored to the standards prevailing among the more fortunate section of the working class. Never would they dare to 'demand' for the workers they claim to represent the mode of life enjoyed by members of the owning class. In other words they accept capitalism; they respect its title to ownership of the resources of the earth; they bow to its class structure. What concerns them is not the fact of slavery but the condition of the slave.

In the case of the Civil Rights movement, the struggle for the establishment of standards for all members of the working class based on the conditions of those workers who have jobs, homes and votes has tended to divide the working class and facilitate the Unionist clique in their efforts to play on the old fears which their political forbears manufactured to suit the needs of the propertied class at the turn of the century.

True, the C.R.A. tried to avoid this at the outset but the Unionist bosses, through the medium of their Party's police, the R.U.C., more and more succeeded in confining C.R.A. activities to Catholic areas and branding those activities 'Catholic' and 'subversive'. It was then only a short step to police violence as demonstrators refused confinement to Catholic areas and Unionist politicians, both ‘extreme' and 'moderate', verbally or by silence, encouraged the more violent Orange extremists into the punch-up between the police and the civil rights demonstrators. History—the political manoeuvreings created to suit the needs of the propertied class, expressed in Ireland in a particularly torturous complex of religious subterfuge—had ensnared the Civil Rights movement: to the Catholic they were now an organisation struggling to win for the most downtrodden section of the Catholic working class the conditions enjoyed, or endured, by the more prosperous section of the Protestant workers. To the latter they seemed a threat to the illusion of his security. Not that they wanted to, but because they failed to understand the real nature of the problem, C.RA. had been forced into the role of another sectarian movement.

Of course the Civil Rights organisations could protest this analysis: they could indicate many speeches and statements in which leading members of their movement made it clear that Protestant workers, too, would benefit from the implementation of the Civil Rights programme in Northern Ireland.

This is true. Not only that, but a few of the Civil Rights spokesmen—sometimes played down by the more 'respectable' elements of the movement—even expressed the Northern Ireland problem in class terms and declared the need for social revolution. Even the latter, however, played the game in accordance with the rule laid down by the political gamesmasters of capitalism. They led the workers on to believe that their poverty—and homelessness and unemployment are expressions of poverty, as is the lack of a local government vote —was the result of Unionist government.

Inevitably, given this thesis, the struggle at local level deteriorated into a slang-match on the relative misery of Catholic and Protestant applicants for jobs and council houses—with, very often, Civil Rights spokesmen extolling a Catholic workers' service to the armed forces of capitalism in support of his claim!

It might be argued that at least the Civil Rights movement have achieved the Unionist Government's commitment to some reforms. Let us examine this accomplishment.

A 'points system' for allocating local government housing. This may ensure that the number of houses which are available will be distributed according to a given formula which purports to measure 'need'. It might rule out religious discrimination in the allocation of houses; it will certainly not rule out the fact of discrimination for no legalistic formula can access personal needs and when there are two applicants for one house, one of them must be discriminated against. Nor will a 'points system' solve the housing problem. The root of that problem is this: in capitalist society, homes, like everything else, are produced for profit and not the needs of the homeless. Those with money don't have a housing problem; it is only the members of the working class that need to enlist the assistance of government and local government councils in an effort to find a place to live.

What is required is not a 'points system' for the allocation of houses but a Socialist system of production for use in which the vast resources of society can be brought to the task of providing homes for all.

And what of that other 'great reform', the extension of the local government franchise? Socialists obviously will greet this as a welcome broadening of the basis of local democracy. But will it solve any working class problems? Certainly, if there was mass understanding of capitalism’s inability to solve the problems of the working class allied to an understanding of the Socialist alternative to the capitalist scheme of things, the additional votes might help Socialists to achieve an earlier local government platform to assist in the final assault on capitalism at central government level.

But the working class does not suffer from the fact that workers who are not ratepayers have no votes in local government elections. The poverty and degradation of working class life stems from the worker's position in capitalist society and the working class have the electoral strength now to overthrow capitalism and institute Socialism. It is not the lack of votes that delays the change; it is the misuse of the overwhelming superiority of those votes which the workers already have. The Civil Rights movement, like all movements for the reform of capitalism help to ensure the continuing misuses of those votes by directing the attention of the working class away from the real source of their problems. Part, too, of the tragedy of the bitter struggle led by the Civil Rights movement for puny reforms is that these have been won at the cost of even greater divisions within the working class—divisions which help to keep capitalism, the very basis of all working class problems, longer in power.

Richard Montague

A Bit of Sanity in Belfast

Every Thursday evening from 8 to 10.30 p.m. the Belfast Branch of the WSP holds informal discussions at the branch room, 13 Queen’s Square Belfast (beside Albert Clock). You are cordially invited,

Enquiries and free specimen Socialist literature from General Secretary, WSP, 13 Queen’s Square, Belfast.

Lutte Ouvrière: Workers Struggling for What? (1969)

From the October 1969 issue of the Socialist Standard

Many ideas which are basic to Socialism are accepted among far wider circles than the ranks of the Socialist Party of Great Britain. Indeed there are many organisations throughout the world which would appear to endorse whole areas of the socialist case. These groups (who often tell us that ‘we are all socialists’) would generally argue that our aims are identical and that it is only on the question of means to achieve the ultimate socialist society that we differ. One such case is Lutte Ouvrière — a group based in France which, on the face of it, appears to share many of our ideas. Their programme socialiste (Lutte Ouvrière — June) correctly summarises the principal features of capitalism:

. . .  the capitalist system, based on the private ownership of the means of production, organises production for profit, without caring about the real needs of men, but on the contrary subjecting man completely to the needs of profit.

and points out why Socialism has become possible and how it will differ from capitalism:

. . . with the development of technology and science it is possible to give to all men a decent standard of living under conditions of total liberty . . . What stands between us and socialism is not scarcity of technical resources but simply the political system (des entraves politiques) which throws the economy into anarchic production, full of contradictions and resulting in insecurity, the destruction of wealth and the alienation of liberty.

But between Socialism and capitalism, argues Lutte Ouvrière, there must be a transition period during which the workers’ state will have a double goal: “to raise individual salaries (as long as the wages system lasts) but above all to develop free and collective facilities (housing, transport, education, public health, sport, leisure, etc.)." This, of course, is merely a rehash of the old Bolshevik maxim that “an epoch of proletarian dictatorship must inevitably intervene between a capitalist and a communist society.” The twin tasks of this transition period or ’dictatorship of the proletariat', said the Bolsheviks, were to boost production through industrialisation and above all to crush the “resistance of the sometime capitalists, landlords, bankers, generals, and bishops. . .” This is obviously a perspective shared by Lutte Ouvrière since they write that workers’ power will involve such measures as an “embargo on the banks, the finance societies, the insurance companies . . .”

To the Socialist Party this seems a completely false assessment of the problems that will face a socialist working class. With Marx we recognise that one of the first priorities for society after a victorious socialist revolution will be to develop rapidly the forces of production. But with Marx too we also understand that this will be achieved within the framework of the common ownership and democratic control of the means of production—in other words within the framework of the moneyless, wageless society of Socialism. This is not the ‘transition period’ but a stage in the development of socialism itself. Hence Marx in his Critique of the Gotha Programme, where he partially deals with this question, refers not to a ‘transition period' but to different phases in a communist (or socialist) society. And, of course, the idea of the workers applying terror during an entire ‘epoch’ to “sometime capitalists, landlords, bankers, generals, and bishops . . .”, which is central to Bolshevik thinking, becomes ludicrous when it is set against the Marxist concept of a democratic revolution by a majority of conscious socialists. We cannot say how fierce the struggles will be at the time of the socialist revolution but it should be clear that once the capitalist class has been stripped of its wealth it will certainly pose no kind of threat to “the self-conscious, independent movement of the immense majority, in the interest of the immense majority” (The Communist Manifesto). It is the Bolshevik fetish of leadership which still makes groups like Lutte Ouvrière cling to their ideas of a ‘transition period’. In the Bolshevik plan of things one minority, the ‘revolutionary vanguard’, holds down other minorities, such as the former ruling class, while the workers are attaining consciousness. The whole scheme might have some slight merit as a rather ingenious fairy tale except that it has always masked the rise to power of a new ruling class.

Lutte Ouvrière are also deeply influenced by Boshevism in their attitude towards parliament. Elections are a ‘masquerade’:

  A masquerade first of all in the goal which is given to them. To elect for seven years a president of the Republic . . .  is no more nor less than choosing the man who for seven years will have the right to send the CRS and the police forces against struggling workers and peasants, against demonstrating lycéens or students.
   . . . They ask the elector to put his trust for seven years in a man who for one month will have come out with beautiful promises as bait, but who once he is elected, will not have to answer to anyone.

Obviously, many of the points made here are valid — but how they can lead Lutte Ouvrière to the conclusion that elections are a masquerade is beyond us. When a capitalist party gains a majority in the national assembly or when a capitalist candidate is elected as president, this indicates that a majority of workers look upon the capitalist system as the only practical method of organising society. This was well illustrated in the presidential elections in France recently when the vast majority of working men and women voted for one or other of the capitalist contenders. Behind the ‘masquerade’ of the millions of votes for Pompidou, Poher, Duclos etc. stood a working class committed to capitalism.

But Lutte Ouvrière claim that this election was different from others because a ‘revolutionary' candidate (the trotskyist Alain Krivine) was standing.

  It is in this sense that the elections are a barometer. That Krivine should obtain 20, 300, 10,000, or 50,000 votes is not a matter of indifference. His score will permit us to estimate approximately the influence of left ideas among the population . . . the trotskyist candidature allows revolutionaries to count themselves . . .

Once again there are valid points here. A revolutionary candidate is useful as a thermometer of support for Socialism — but, as the Socialist Party has always emphasised, this is only achieved if he runs on an exclusively socialist ticket. A reform programme, such as Krivine embraced and which caused Lutte Ouvrière to support him, defeats the object of the whole exercise. Our criticism of Krivine’s programme is well summed up by this passage from Le Prolétaire (Programme Communiste):

  The ‘socialism' of the trotskyists does not cause the economic categories of capitalism to disappear: the wage slave remains a wage slave, the product remains a commodity. Nothing is changed . . . Mr Krivine and his friends then have nothing in common with the historical programme of the proletariat, nor as a result with the struggle of the working class and the revolutionary and scientific socialism of Marx and Engels.

Another hangover from the bourgeois ideology of Bolshevism in the programme socialiste of Lutte Ouvrière is their idea that the socialist revolution will be essentially a national affair, the workers gaining power country by country.

  The workers’ power will maintain economic and political relations with other countries by giving in the first place its support to the exploited of these countries.

It seems that they seriously imagine that Socialism will be achieved in France while Britain and Germany, or America and Russia, or Japan and China remain gripped by capitalism. But ideas today are international. When a group like Sheng Wu Lien in China points out that China is a capitalist country and explains that the so-called cultural revolution has merely enabled the ‘red capitalists’ led by Mao to tighten their hold on the means of production, they are talking a language which radicals in every continent can understand. Or when a tin-pot capitalist revolution on a small island in the Caribbean led by unoriginal political thinkers like Castro and Guevara is successful, its repercussions echo round the world. So Lutte Ouvrière should ask themselves what would be the likely effects on the world working class of a mass socialist movement starting to appear in any one country. The Socialist Party of Great Britain suggests that by the time the workers in France or anywhere else are turning to Socialism and preparing to take power they will be doing the same in every other advanced industrial country. World Socialism will be the outcome of a world socialist revolution..

It is on these grounds that the Socialist Party urges the members of Lutte Ouvrière and the many groups like it to examine their strategy and tactics. Like them we think that “world communism which will co-ordinate in a harmonious fashion the sum total of human activities yet also protect the peculiarities and customs of each section of the population” is an aim worth struggling for. But the Socialist Party also maintains that means and ends are indissolubly linked. A world socialist community can only be achieved by a majority of conscious socialists capturing political power in order to reorganise society on a basis of common ownership and democratic control. Attempts to apply Bolshevik or syndicalist techniques to the struggle for Socialism are self-defeating because inevitably such means cause those who use them to arrive at a different end from Socialism.

John Crump

Statement to a Conference of German Workers in Augsburg (September 1969) (1969)

From the October 1969 issue of the Socialist Standard

Fellow workers,

1. We state below some of the principles on which, from our point of view, a genuine socialist party must be based and we hope by making a useful contribution to your discussions. We have divided our report into three parts:

I Socialism.
II The Way to Socialism.
III Reforms of Capitalism.

I. Socialism

2. A socialist party must first be clear that Socialism is a system of society based on the common ownership and democratic control of the means and instruments of production and distribution and in the interest of the entire community. Socialism is a world community without frontiers, where wealth will be produced solely for use. Buying and selling, and with it prices, wages, money, profits and banks will disappear. Instead, everybody will have free access from the common store according to their needs. Socialism is a fully democratic society. The coercive state machine of class society will be replaced by the simple democratic administration of society’s affairs.

3. Government ownership of industry, or nationalisation, is state capitalism. In state-run industries workers are still exploited for profit through the wages system and still need to organise into unions and to strike to protect their interests. Nationalised industries are run on capitalist lines producing wealth for sale. They have nothing in at all to do with Socialism.

4. Socialism and Communism are not different systems of society ; both describe the same society based on the social or common ownership of the means of production. The false distinction which sees Socialism as a stage in social evolution between capitalism to Communism is a fabrication of Lenin‘s.

5. Russia is not and never has been a socialist society. Its social system has all the essential features of capitalism, viz., class monopoly of the means of production, class rule through the state, the wages system, capital accumulation and production for profit. Russian society is best described as state capitalism.

6. The 1917 revolution was not a working class or socialist revolution. It was merely the Russian equivalent of the English Revolution of 1688 and the French Revolution of 1789. Like them, it brought to power a class whose task was to clear away the obstacles to the further development of a market economy based on wages and profits, i.e. capitalism. Despite their socialist talk, the Bolsheviks had to develop capitalism in Russia. No matter how ruthless their dictatorship, they could not overcome the laws of social evolution which said that Russia, as a backward country with a predominantly peasant economy, was ripe only for capitalism and not for Socialism.

7. Nor has Socialism been established anywhere else, not in East Europe, China, Yugoslavia or Cuba for instance. The “socialism” of the privileged rulers of these states is ultimately derived from the Lenin-Stalin distortion. Their policy of national state capitalism has nothing in common with genuine Socialism.

8. The various so-called Communist Parties of the world are not socialist organisations, but have functioned primarily as overseas agents of the Russian capitalist class and its government.

II. The Path to Socialism

9.  Socialism can only be established by the majority political action of a working class that wants and understands it. To establish Socialism, the working class must first win control of political power and to do this they must organise as a political party.

10. That the majority must want and understand Socialism has been a principle which has distinguished us from all other parties who have claimed to be socialists. The Social Democrats did indeed assert that they wanted majority backing but did not insist that this be of a socialist nature while the Bolsheviks never believed that it was even possible for a majority to reach socialist understanding.

11. Once the nature of Socialism, as a free society based on voluntary work and free access to all the fruits of that work, is grasped, that it can only be set up by conscious majority action should be obvious. The voluntary cooperation and social responsibility that Socialism demands cannot be imposed by a minority of leaders; the people must cooperate to make it work because they want to.

12. This is why leadership is an anti-socialist principle. Once again, Lenin’s pernicious influence on working class political thought is evident. For he believed that by themselves workers could only reach a trade unionist or reformist political consciousness and that socialist understanding had to be brought to them by leaders, his “vanguard party”. As a result Lenin’s conception of the socialist revolution — a conscious minority leading a discontented majority by means of well-chosen slogans in an assault on the state, smashing it and building another with the conscious minority as the new rulers — was a caricature of the bourgeois revolution. In fact, Bolshevism is really a twentieth century theory for bourgeois revolutions in peasant countries.

13. Lenin’s pamphlet The State and Revolution is a gross distortion of Marx’s views on the state in which he tries to demonstrate that Marx argued that workers should stage an armed rising against the “bourgeois” state and then construct a “socialist” state in its place. To us (as for Marx), the phrase a “socialist state” is a contradiction in terms. Where there is Socialism there is no state ; where there is a state there is no Socialism.

14. Traditionally, the discussion on peaceful versus violent methods to achieve power for Socialism has been conducted between people who were all committed to minority action in one form or another — the Bolsheviks, the Social Democrats and the anarchists. To us, as advocates of majority action, such a debate is largely academic, but we can readily admit that a minority has much more need to resort to violence to achieve power as than a majority .

15. The discussion takes a completely different dimension when based on the recognition that first there must be a majority of convinced Socialists. For, with majority socialist understanding, violence is unnecessary, unless the pro-capitalists resort to it . The socialist majority can use universal suffrage both to show that it is a majority and to send its delegates to parliament and local councils, thus gaining control of the state machine.

16. We maintain that the further development of the economic and political trends Marx himself saw as making for a peaceful revolution has made the barricade and the street battle outmoded as a revolutionary tactic. In modern political conditions — the overwhelming numerical superiority of the working class, universal suffrage, political democracy, an army and civil service recruited from the workers — the working class can, and should, use elections and parliament as the way to winning power for Socialism. A socialist party should contest elections whenever it can, but only on a socialist programme. Where there are no socialist candidates, the party should advocate the casting of blank or spoiled voting papers and never engage in anarchist-type anti-election propaganda.

17. The anarcho-syndicalist idea of a general strike of industrial unions as a means of overthrowing capitalist rule is obviously impractical since it leaves the means to crush any such strike, the state machine, in the hands of the capitalists.

18. Much the same can be said of the use of Soviets or workers’ councils as an alternative to parliament. After 1917 Lenin (somewhat hypocritically since he knew that the Bolsheviks had seized power not through the Soviets but through a well-planned military coup in which the Soviets were used only as a facade) proclaimed that in the Soviets the specific method of working class emancipation had at last been discovered. But the soviets were only, as was pointed out in a brilliant series of articles by the Russian Menshevik Martov, an expression of the lack of political development in Russia. Tsarist oppression was so far-reaching that once it was ended the workers and peasants had to create makeshift institutions to express and carry out their wishes; in more developed political conditions this would have been unnecessary since such institutions, in trade unions, political parties and local councils, would already have been in existence.

III. Reforms of Capitalism

19. The party which the working class will use as an instrument for winning political control must be organised on a democratic basis. Control of policy and administration must be entirely in the hands of its members; there must be no leaders and those chosen to carry out various functions must be answerable to the membership. There must be the fullest opportunity for free discussion of party policy. Such is the basis of the Socialist Party of Great Britain.

20. At some stage in the development of the socialist movement in each country socialists must organise as a party, with its own rules and democratic discipline, in place of the discussion groups and journals or educational societies they may at first find convenient.

21. Since a political party can only be what its members are, if a socialist party is to remain such it must recruit only socialists to its ranks. This is especially necessary in a democratic party where all members have an equal say in forming policy. Passing a test of basic socialist knowledge should be a condition for joining the party.

22. Again, in order to remain socialist, the party must only seek support on a socialist programme. Inevitably, in present circumstances, this will result in the party being comparatively small, but there is no other sound way to build a genuine socialist party. This is shown by the fate of Social Democratic parties all over Europe which, despite an original paper commitment to Socialism as an “ultimate aim”, admitted non-socialists to membership and sought votes on a programme of capitalist reforms rather than of Socialism. In order to retain their non-socialist support they themselves were forced to drop their talk of Socialism and to become ever more openly reformist. Today the Social Democratic parties are as firmly committed to capitalism, in theory as well as in practice, as those who have never pretended otherwise. We say this was the inevitable result of admitting non-socialists and of advocating reforms of capitalism.

23. This is why we have always advocated Socialism alone and never reforms of capitalism. We are not saying that all reforms are anti-working class, but that for a socialist party to advocate reforms would be its first step towards becoming a reformist party.

24. This is one of the important points on which we disagree with Rosa Luxemburg. In her Reform or Revolution she presents a good case against reformism but still argues that socialists should advocate reforms on the ground that socialist understanding will grow out of the struggle for reforms. We submit that experience has proved her wrong. It does not matter why or how reforms are advocated the result is the same: confusion of working class thought rather than growth of socialist understanding.

25. Rosa Luxemburg was wrong on a number of other points, for instance, her economics of the collapse of capitalism. Capitalism will never collapse of its own accord, as she suggested, it will stagger on from crisis to crisis till the working class consciously organise to bring it to an end. She was wrong too on “spontaneity” when she suggested that “mass action” often failed because of the conservative and restraining role of the parties the workers supported rather than on the non-socialist ideas of the workers themselves. Nevertheless, we recognise that on a number of other points like reformism, Bolshevism, the first world war slaughter and nationalism she reached much the same conclusions as us.

26. A socialist party must oppose nationalism in all its forms and refuse to compromise with it in any way. Talk of “Socialism in Germany” or “Czechoslovakia for the Czechs and Slovaks” is dangerous nonsense. Socialists should always make clear that the workers have no country and that Socialism can only exist on a world scale.

27. A socialist party must also expose religion and its role as a prop for class society. Religion tries to prevent the spread of a scientific view of the world, man and his history and must be opposed by a clear statement of the case for scientific materialism. However, a socialist party should not get bogged down in mere anti-clericalism by advocating such reforms as the separation of Church and State or secular education.

28. There are many other aspects of our case we should like to have presented (such as on war, fascism, anarchism, trade unionism, whether a transition period is still needed) but this statement is already long enough. We invite you to send us any comments and criticisms on what we have written above and to ask for our views on any subject we have not been able to cover.

 Yours for Socialism,

The Executive Committee,

The Socialist Party of Great Britain

August 1969.

Disunited Ireland (1969)

Pamphlet Review from the October 1969 issue of the Socialist Standard

The Economics of Partition. Irish Communist Organisation Pamphlet No. 16 (January 1969) 2s. 6d.

This pamphlet, by a group of Irish Maoists, is a surprisingly good Marxist analysis of Irish history and politics. You have got to take into account first the terminology—imperialism, the nation, democratic people’s struggle—the assumptions behind which are unacceptable. This done, what emerges is the kind of analysis we ourselves have made for years: that Partition arose out of the uneven development of capitalism in Ireland and the consequent conflict of interest between rival sections of the Irish capitalist class, mainly over tariff policy.

Up to the nineteenth century it was the North that was the backward port of Ireland while industry flourished in the South. After (though not because of, as many Irish nationalists were to assert) the 1802 Union with Britain, industry actually declined in the South while it grew in the North East. The basic reason for this was economic: the different systems of land tenure in the two parts of the country. In the South most of the peasants were tenants-at-will on short one-year leases which gave them no security of tenure nor any incentive to improve the land (since the landlord would benefit by increasing the rent). But in the North, under "Ulster custom”, the farmers had won security of tenure and, freed from oppression by rack-renting landlords, were able to accumulate the money to develop capitalist industry.

Northern industry, however, served not the “home market” of Ireland but the British and imperial markets. Northern I industry was in fact a part of British industry. The petty capitalists of the South, on the other hand, wanted protection from British competition so that they could grow bigger. The stage was thus set for a fundamental conflict of interest between the big capitalists of the North East and the smaller capitalists of the South.

When Home Rule became a big political issue because of the support given to this demand by a majority of Irish people, the Northern capitalists won the support of a majority in their area by stirring up Protestant anti-Catholic feelings ("Home Rule is Rome Rule") and threatened physical force to resist incorporation into a Home Rule Ireland. They were determined not to be cut off from the imperial markets and confined behind the tariff barriers the petty capitalists of the South wanted.

Faced with this determination the British government retreated and in 1914 proposed Partition. This was acceptable to the North, but it took until 1922, and a guerilla war, before this was accepted by most of the South.

The Border was thus just a tariff barrier between the British imperial market and the Irish home market. The Partition question is thus, say socialists (but not the ICO), of no concern to the working class. It makes no difference to them whether they are ruled from Dublin, Belfast or London. The World Socialist Party of Ireland is in fact singled out for specific criticism for its attempt to “by-pass" the Partisan issue. “Denying the fundamental importance of the Border" is denounced as a “blind alley". Of course it is important to explain why and how the Border came into being but, once you have shown that it is just a tariff barrier, it should be dear that is of no concern to the workers, that it is not something they should get worked up about or should kill and die for. We stand by what we said in 1949 and challenge the ICO to deny it:

  “the removal of 'the Border’ will not remove one social evil from which the working class suffer; and so, it is obviously not a problem which concerns the working class".

Adam Buick

Capitalism in Eastern Europe (1969)

Book Review from the October 1969 issue of the Socialist Standard

‘Economic Devolution in Eastern Europe’, by Ljubo Sirc. (‘Problems of Capitalism in Eastern Europe’ series. Longmans – for the Institute of Economic Affairs, 35/-)

Dr. Sirc, now a lecturer in International economics at Glasgow University, was born in Yugoslavia and fought with Tito’s army during the war but, like a number of other supporters of the Yugoslav regime, he came into conflict with the government and he was imprisoned for seven and a half years in 1947 for 'conspiracy against the State'.

His book deals with the way the original centralised control and planning of production, distribution and prices in Eastern European countries, including Russia and Eastern Germany, has had to be modified in the direction of decentralising decision making and allowing the market forces of profits and competitive prices to operate, more on the lines of Western Capitalism. He also tries to foresee further changes that will be forced on the governments concerned.

Dr. Sirc approaches his subject as if it is a study of the problems and failures of Socialism, but once this absurdity is discounted the reader will find in the book many facts and figures illustrating the inescapable capitalist pressures at home and in the world market which have compelled the governments to change their economic and political policies and will continue to do so.

His central theme is that “the old Stalinist Soviet model was very inefficient”, producing as it did, “goods which nobody wants to buy . . . productive capacities which cannot be used, keep personal consumption very low and causes foreign trade difficulties”.

He stresses the point that inefficient centralised control resulted in industries carrying a labour force in excess of their real needs so that when the efficiency is raised by various reforms large scale unemployment appears; hence the movement of thousands of Yugoslavs into Germany, Austria and Sweden and the efforts of the Hungarian government to find work for unemployed Hungarians in Eastern Germany and Russia. Czechoslovakia faces the same problem.

An interesting parallel with this is the British Labour Government’s Selective Employment Tax and other measures designed to squeeze workers out of the distributive trades and induce them to go into production industries ― if they can find jobs there.

Inevitably, in view of Dr. Sirc’s assumption that he is dealing not with State capitalism but with Socialism, the alleged inadequacies of Marxism are brought under attack. Marx’s blueprint for the society of the future, and specifically its “Marxist-Leninist” offshoot, was he says, imprecise and inapplicable to the circumstances of the Eastern European countries under Communist Party dictatorship. He likewise finds that Marx’s historical materialism “has proved false”. To support his case he quotes the head of the Slovene government who argued that some private enterprise is essential in Yugoslavia and that “it is not worth while nationalising all productive processes”. He appears to be quite unaware that, as Marx well knew, nationalisation or state Capitalism is not Socialism.

Although the old, rigidly centralised, organisation is under growing attack among members of the governments and economists the claim that the new methods are also “Marxist” will no doubt continue, at least for many years. An interesting example comes from Yugoslavia, the country which has gone farthest in introducing decentralisation. Sir Fitzroy MacLean, Conservative M.P. recently interviewed Marshal Tito (Sunday Times July 6, 1969). MacLean summarised the present situation in Yugoslavia, following the reforms of 1965:-

  Under which individual, commercial and industrial enterprises dispose of their own funds, fix their own wages and prices and are almost entirely free from State interference or control, while vigorously competing among themselves.

MacLean also points out that the Yugoslav government allows in foreign capital and encourages “a measure of private enterprise.”

He asked Tito “Is all this good Marxism?” and got the answer : ―

  We ourselves believe that what we are doing is in strict accordance with the principles of Marxism-Leninism, especially in regard to the withering away of the State.

It remains to be seen, with regard to the economic changes themselves, how far Russia and the other Eastern Countries will be forced to follow the Yugoslav example.

One important factor in this is the need the Russian satellite countries have for foreign capital to speed up development. The West German government is reported to be discussing with the Polish government (at the latter’s invitation) plans to make German capital and technical aid available to build up Polish industry. Behind this, according to Herr Arndt, the German Minister concerned, is “that the Soviet Government is now admitting that it does not have the capacity to supply the necessary technical assistance to the Eastern countries on its own.” (Financial Times, 25 June 1967).

Edgar Hardcastle

50 Years Ago: Work and Want (1969)

The 50 Years Ago column from the October 1969 issue of the Socialist Standard

In 1914 your masters appealed to you as ‘patriots’ to save 'your country' from the fury of their enemies. To-day in flaring posters on the same hoardings they beg you to ‘save your country’ from bankruptcy. Greater production, they tell you, is necessary, and that is where you come in. They call on you to put your backs into it because you are the only producing class. Without an increase in the aggregate wealth your class, they say, must suffer deeper extremes of poverty. But is it an increase in the aggregate wealth your masters want? No, for if it were they would set the unemployed to work instead of increasing their numbers by wholesale dismissals weekly. Prices are high they tell you because there is a real shortage of wealth—of the necessaries of life. If this is true why are there unemployed? Because your masters are not concerned with increasing the total quantity of wealth; their desire is for more surplus value i.e., the difference between the wealth you produce and the wages you receive . . . What they ask from you is more work from the individual worker, in order that the total wages bill can be reduced, the very conditions that have always made for increased unemployment.

If you rely on the government’s schemes of reconstruction, in your simplicity believing in their fair promises, they will strengthen the position of their class, and correspondingly weaken the position of your class. If you support the Labour Party, they will sell your support for fat jobs. If you dream that nationalisation will save you, you will, when you awaken, find yourselves under the rule of the bureaucrat and expert—still wage slaves, exploited in the interest of all capitalists instead of that of a company or trust.

(From an article by Fred Foan in the Socialist Standard October 1919). 

The British CP (1969)

Book Review from the October 1969 issue of the Socialist Standard

The Sociology of British Communism by Kenneth Newton (Allen Lane. 50s.)

As the title suggests, this book sets out to study what sort of people join the Communist Party and why, but it does not get very far as Newton himself admits that interviews with a couple of dozen Communists is not much to go on.

Newton is fair to the Communist Party pointing out for instance that it is silly to blame them for fomenting strikes. After all, he says, when during the war they were strikebreakers and blacklegs they could not prevent strikes. He notices, as any impartial observer must, that over the years the Communist Party has dropped its mock revolutionary phrases and become an openly reformist party:

   “The British Communist Party . . . has come to accept the philosophy of gradualism and piecemeal reform, though the reforms it demands are still more radical than those of the other political parties in Britain”. 

Newton is also fair to the Socialist Party of Great Britain pointing out that, in contrast to the CP, we “demand a knowledge of socialist prindples before (we) allow applicants to become members” and also that we are a “thoroughly democratic” organisation.

There are a number of mistakes like saying the Socialist Labour Party was the largest of the groups that formed the Communist Party. In fact, the British Socialist Party was, and only a breakaway faction of the SLP joined.

Adam Buick

The Capital Levy again (1969)

From the October 1969 issue of the Socialist Standard

The Labour Party National Executive, with an eye to the next General Election, is issuing a series of discussion documents to form the basis of policy to be recommended to the Party’s Annual Conference this month. The first of these, Labour’s Economic Strategy, covers a wide field, much of it already familiar in Labour Party propaganda, including government direction of investment in industry; limitations of dividends and top salaries; regulation of conditions of employment.

It proposes a “Workers Charter” giving the individual worker a legal right to training and retraining and assistance in moving jobs, transferability of pension rights on change of jobs and a new redundancy payments scheme. Special arrangements are proposed to raise productivity and wages in industries with particularly low wage levels.

Although the Report says that the Labour Party's attitude to “public ownership” has not changed and that “more and more of Britain's industries must move inevitably into public hands” the specific proposals relate only to the aviation industry, drug manufacture, North Sea Gas and a State Building Corporation and most this is for government shareholding, or the setting up of a government body competing with private companies, not the creation of new government monopolies. The Times (21 August 1969) reads into it “further evidence of a swing away from Nationalisation policies in favour of greater intervention by the State in the control and shareholding of British industries”.

The item in the Report which drew most attention in the Press is however a proposal for an annual Wealth Tax, a tax levied not on income but on accumulated wealth. Fortunes of less than £50,000 would be exempt and the scheme would start with an additional annual tax of £500 on £50,000 rising to £20,000 on a fortune of £400,000. The rate above £400,000 would be 5 per cent. It would raise an additional £250 million a year.

This is not the first time the Labour Party has advocated a tax on wealth. Under the name Capital Levy the Labour Party's election address in 1918 proposed a levy starting on ownership of £1,000 and with steeply graduated rates “so as to take only a small contribution from the little people and a very much larger percentage from the millionaires.” They later raised the proposed exemption limit to £5,000 but the whole scheme came to nothing as the Labour Party lost the election and it was not seriously revived when the first Labour government took office in 1923.

The outstanding difference between the 1918 proposal and the present one is that in 1918 it was intended to use the money raised by the levy to pay off the National Debt,, thus reducing the government’s annual payments of interest to investors holding Government securities. This time the wealth tax is to provide additional government revenue without reducing taxation.

Quite unintentionally, but with devastating effect, this new Labour Party proposal vindicates the Socialist Party of Great Britain's argument that trying to reform capitalism by gradual inroads into the wealth of the propertied class (not that Labour are trying to do this anyway) is utterly futile. In the 1918 Labour Party election address it was stated that “one tenth of the population owns nine-tenth’s of the riches of the United Kingdom”, and at that and every subsequent election the Labour Party has declared its intention to get rid of this inequality. Now, half a century later, it is frankly admitted that all of the measures supposed to bring about equality—death duties, steeply rising income tax and sur-tax, social services and nationalisation among them — have left: a condition of “extreme concentration of wealth”.

On the official figures quoted in the new Labour Party report, the degree of concentration appears to have changed to that now the top ten per cent own only 74 per cent of wealth, but the Report itself challenges the accuracy of the figures. Being based on death duties these figures “under-estimate the degree of concentration” because they ignore wealth which evades death duties by gifts made during the individual's life time, or by the setting up of trusts and family settlements and the like.

The Labour Party suggests new measure to stop the leaks and evasions but it is well-nigh certain that new devices for tax avoidance will be discovered and the inequality will go on. An example of what does happen as capital accumulates and income from rent and profit increases is the Ellerman family fortune. In the nineteen thirties it was cut from £40 million to £18 million by death duties but within four years it was back to £40 million. (Evening Standard 8 & 9 September 1937), and an article in the Sunday Telegraph (17 August 1969) estimated that it is now £150 million.

Many workers will no doubt be persuaded that new measures to tax the rich will weaken capitalism and benefit wage earners.

The Labour Party Report provides an answer to this too, for in the desire to prove the practicability of a tax on wealth, it states that a wealth tax of this kind is already operating in a large number of countries, including the whole of Scandinavia as well as Luxembourg, Holland, Germany and Switzerland and capitalism is not “weak” in any of these countries.

Proposals of this kind have nothing to do with Socialism, nor do they help to raise working class living standards. As in the countries named, the introduction of a wealth tax in Britain would be just one of a number of alternative methods of meeting government expenditure in the interests of capitalism.

The broad aim of the Labour Party is admitted to be that of raising productivity and efficiency, increasing capital investment and in general to maintain the competitive position of British industry. If they had the opposite intention, that of improving the financial position of the workers at the expense of the property owners, they could quite simply take off wage restraint and encourage wage claims.

Socialism is not a better way of running capitalism but a world wide system of society in which the private ownership of the means of production and distribution would be replaced by social ownership. Not some promised encroachment on private ownership but its abolition.

Edgar Hardcastle