Why the Unemployed are Necessary under Capitalism. (1908)

From the December 1908 issue of the Socialist Standard

Beyond doubt the problem of unemployment is beginning to assume a new aspect. Hitherto a regrettable, but quite incidental, visitation of Providence, a working-class concern (as bad trade has been to do with the master class), a temporary inconvenience, our rulers have said, not entirely beyond the ameliorative touch of Private Charity, the problem is now developing a new visage.

The Incubus of the Out-o’-Work.

There is an ugly gleam in its eye, an all-devouring menace in its bestial mouth. No longer can the capitalists pretend that Private Charity is able to deal with the situation—it has been like a bee lending its honey sac to the support of a hungry elephant. It is so short a while since the dread shape was rampant over the land, and now it rises again, with added stature, with renewed rage and redoubled vigour. But the disquieting thing is that during the interim the shape has never for a moment been banished. Our lords and gentlemen and honorable boards, our masters and pastors and those set in authority over us, our organisers of production and captains of industry, all took it for a ghost, and tried to “lay” the ghost each in his own way. And alike for those who took it to the Lord in prayer, and those who passed measures in the legislature, and those who offered propitiation out of the lean purse of Private Charity, and those who accepted the Miltonian dictum that “they also serve who only stand and wait,” the shape unobligingly refused to be “laid.” The thing has not righted itself, even temporarily.

A strengthening suspicion is spreading over the minds of the master class that when the thing does right itself, it will do so in a way distinctly unpleasant to them. It dawns upon them that this thing which, they with complaisance regarded as a cross the workers had to bear, threatens more and worse against the rulers than the ruled. The idea takes shape that this nightmare is the product of their own operations, the inevitable and ominous companion of capitalist production, and they go in mortal fear that, sooner or later, it must overwhelm them.

The Policy of Sop Throwing.

Hence there are signs that every cheap expedient is to be used in the endeavour to stave off the flood of destruction which threatens to burst from this heaped up and increasing mass of humanity so completely cut off from the means of life. And are these efforts to succeed ? Let us enquire into the nature of the problem.

It is not the mere fact that so many men are idle that constitutes the serious feature of the problem. It may be no unmixed blessing to have this army of workless workers kicking their heels together, especially when the devil begins to apply his solution by finding work for their idle hands to do, but it is nowhere suggested that any other consideration can compare with the fact that the unemployed lack the necessaries of life—they starve in their great numbers, and those greater numbers dependent upon them starve in company. The real problem is, therefore, not to provide work for the unemployed, but to furnish them with the means of subsistence. It is a misnomer to call it an unemployed problem it is a starvation problem.

The solution of the starvation problem has been left to Private Charity: she has failed. They say the goddess has a slender purse, and we know that is true. Let us then suppose Private Charity’s purse as broad and deep and illimitable as her heart is said to be, that out of her bottomless resources and melting pity she could and did give to repletion to all directly or indirectly suffering from the effects of unemployment, what then would happen ?

The Awful Indolence of Man.

Alas for her peace of mind, our masters never tire of telling us what would happen. “Human nature,” they say, “would assert itself. It is not human nature to engage in uncongenial toil save under pressure. Remove the pressure of want from the unemployed and at once you have an army of ‘won’t works.'” Private Charity consents to the judgment, as must you and I.

There is no doubt about it, man does not sell his labour-power, and with it necessarily his liberty, for fun. To be unemployed is no terrible hardship in the absence of the poverty which accompanies working-class unemployment. Relieve us of the coercive force of the empty stomach, the shameless importunity of the landlord, and so on, and, frankly, we would not worry about work—our human nature is not so different from that of our betters that we need blush to confess that. And then what would happen ?

What would happen, my friends, in this impossible case, is just this. Those in employment,, finding themselves relieved of the competition of the workless (we will leave out of consideration the fact that their “human nature” would impel them to become workless, too, upon such terms), would begin to cast about them for some means of improving their condition. As it is true, as our masters tell us, that the workers would not sell themselves to toil unless they were forced to, it follows that they would oppose a more effective resistance to the weakened coercion. They would demand a higher price for their labour-power, either through increased wages or a shorter working day, or both.

Nothing Left for the Boss – What O !

We are taking here the extreme case, in which the labour market is entirely and effectually relieved of the pressure of the unemployed—whether by provision of work or of direct sustenance does not matter one iota. Theoretically, the worker, being without a competitor, would have things all his own way. Wages, being a price, must rise by leaps and bounds, as all prices do in the absence of competitors. And as, mind you, wages are that portion of the total value created which is enjoyed by those who create it, it follows that a rise in wages results (other things remaining constant) in a decrease of the portion of value left to those who do not create it.

Now mark the effect. Capitalist demand for labour-power is excited only by the desire for that portion of the value created which remains after that labour-power is paid for, and will therefore be in proportion to the relative amount of that surplus-value. Just as the removal of the unemployed from the labour market has torn from the employing class the power of resisting the demands of the working class, so now the diminished profits react against the worker by lessening the demand for labour-power which the desire for profit alone creates. Those concerns which have been run at the lowest profit, immediately cease to show any at all, and are shut down, and Private Charity has other hordes to comfort at her eleemosynary bosom. Solomon gurgled of “breasts like towers,” but she needs breasts like oceans for the job she has taken on, must wear thin and thinner with the calls upon her system, and after all her sacrifice will prove unavailing, for wages, rising to the point of extinguishing all profit, has extinguished with it the capitalists’ desire to engage their factories

and machinery in the process of wealth production.

No Profit, No Production.

Here is a deadlock. The solution of the unemployed problem by sustaining the workless has resulted in the raising of wages, the absorption of profit, and, as a necessary corollary, the cessation of production. From which it appears that idleness has its dignity, no less than labour, since the unemployed are necessary to capitalist production, and that it is true indeed that “they also serve who only stand and wait.”

But capitalist sophism tells us that other things do not remain constant—which, of course, is true enough. We are told that a rise in wages is followed by a rise in prices, but this is presuming too much upon our ignorance. The workers create all value, whether it take the shape of golden sovereigns, loaves of bread, stained glass angels, or what not. If then the price of loaves went up alone the sovereign would buy fewer than before; but if the price of gold rose proportionately, the relative positions of the two remain the same. Just all prices are to go up, since all commodities are the result of wage labour and all wages are to rise. The result is that none of their relative positions have changed. The sovereign still buys as many loaves before, as many Manifestoes or SOCIALIST STANDARDS. There has then been no rise in prices, though, since our ingenuous masters always except one commodity (labour-power) from the added price-stature, they manage to indicate a fall in wages—which is all they want to do. But, with no unemployed “standing and waiting,” the working class would hold the whip hand. And all this is apart from the fact that prices of commodities do not bear relation to the cost of the labour-power consumed in their production, but to the amount of necessary labour embodied in them.

Machinery creates its own Unemployed.

Again other things do not remain constant. We have been considering an extreme case, where production has ceased because profit has ceased, and all because there were no unemployed to keep down wages. It is clear then, that if production is to continue, is must either do so under conditions in which its operation is not dependent upon profits, or the unemployed must be again brought into being to force down wages and allow profit to reappear.

The system makes beautiful provision for this by the law of the development of machinery. In practically every trade there exists machinery and methods in partial use far in advance of that generally employed—indeed, all through the industrial world there are degrees of perfection or imperfection in the means of production, tailing away into antiquity so distant as can just be run at sufficient profit to save them from extinction. In each degree of development there is a fringe where it is a question if better machinery could not be more profitably adopted. Any raising of wages at once decides the question. At all times machinery is the competitor of labour-power. To increase the price of the latter is merely to hasten its displacement by the former. In the printing world the Linotype composing machine is an accomplished fact. It is not that the machine would have to be invented—it is there, doing the work of several men under the hands of one. The only question is the diameter of the circle of its profitable application, and this, of course, is a matter of competition with the hand compositor.

An Automatic Adjustment (not patented).

If the wages of the latter go up, there is a corresponding advantage on the side of the machine, an enlargement in the circle of its employment, and an addition to the unemployed army to beat down wages again. It may be said that the machine operator’s wages rise also, but that is only one man’s wages against several displaced by the machine. It may also be objected that the cost of the machine is raised since higher wages must be paid for its construction, but that lands us again in the impossible position of witnessing an all-round rise in prices, and runs counter to the economic verity that prices (averaged by rises and falls cancelling one another) express, not the amount of wages consumed in producing the commodities, but the necessary labour embodied in them.

The fact is that every advance in wages reacts upon machinery and methods, pronouncing the doom of those requiring most labour-power to operate them, throwing men out of work, and so creating that army of unemployed which is necessary to the continuance of production so long as production is carried on for profit.

The position may be summed up as follows. As under present conditions all commodities are produced for profit, production must cease with the cessation of profit. As profit and wages between them constitute, and have their only source in, the value created by the worker, profit can only appear while wages are prevented from consuming the whole product of labour. As wages, the price of labour-power, are regulated by the relation of supply and demand, a surplus of labour-power (the unemployed) is necessary to prevent wages swallowing up all profit.

The Logic of the Revolutionary Proposal.

Therefore the unemployed army is a vital necessity to capitalist production, and there can be no solution under capitalism.

As wages are regulated by the relation of supply to demand of that labour-power which it is the price of, any diminution of the surplus (unemployed) labour-power is attended by a rise in wages. As machinery is the competitor of labour-power, any rise in the price of labour-power induces its displacement by machinery, which thus creates in perpetuity the out-of-work army. Therefore there can be no partial solution to the unemployed problem under capitalism.

As profit is the only incentive to capitalist production, and an unemployed army is an inevitable necessity to the production of profit, it is clear that the solution of the unemployed problem must be sought in a new productive objective—production must be independent of profit.

As the consumer demands the production of commodities because they are use-values, and demands them as long as they have use-value, it is clear that utility would be a more constant incentive to produce than profit, since things have always utility while people need them, and it is just when people need them most, because they are starving, but have no money to pay for them because they are unemployed, that there is no profit in their production.

As production for profit implies the power to wrest from the workers part of their product by keeping some of them (the unemployed) from production, it presupposes also private ownership by the few of the machinery of production.

And as production for use means production while any one has need, it implies free access to the means of production—in other words, common ownership of the means and instruments for producing and distributing wealth, by and in the interest of the whole community.

The establishment of this changed property condition is the revolutionary proposition, the object of all Socialists. It is revolutionary because it changes the whole structure of society from top to bottom. In particular it abolishes the unemployed by giving free access to the means of production.

Socialism is the only cure for unemployment, therefore study Socialism.

A. E. Jacomb

Finance and Industry: What is profit ? (1965)

The Finance and Industry Column from the August 1965 issue of the Socialist Standard

What is profit ?

Last March the Daily Worker had an interview with the Russian economist, Prof. Liberman, whose views on the role of profits in the Russian economy are well known. In the course of the interview Liberman told special correspondent Peter Temple:

“Profit is—like money, wages and prices—an essential part of any economy based on commodity production. It’s merely an expression of surplus product. If we didn’t have any surplus product, then we would be consuming everything we produced and it would be quite impossible for society to develop. Socialist profit is entirely different from capitalist profit, both in its origin and in its designation. In a Socialist society it arises solely from better and more efficient production, producing more goods and services with less expenditure of time, power, raw materials—and that’s all. But capitalism extorts profit from exploiting labour, cutting the workers’ wages, raising prices to the housewife.”

A similar argument was put forward by George Brown when he addressed a meeting of businessmen in Newcastle on May 22. The Times on the following day reported his words under the headline PROFIT MOTIVE AS TEST OF EFFICIENCY. Said Brown:

“As long ahead as we can see Britain is going to have a mixed economy with a very large private enterprise sector. Therefore the profit motive has a very important role to play. It is time we stopped being silly or doctrinaire on all this. Profits are a very good test of efficiency when earned by enterprising management introducing better methods or new products in competitive conditions. They are not good if they arise out of management using market power to raise prices.”

Both Liberman and Brown commend profits that are supposed to come from efficiency and condemn profits that are supposed to come from raising prices. The only difference is that George Brown, unlike Liberman, hasn’t the insolence to call his “good” profits “socialist”. In any event both are confused over the nature and source of profits.

In a way, Liberman is right when he says that profit is something to do with the surplus over and above what is consumed. For thousands of years Man has been able to produce more than he needs for bare subsistence but this surplus has been taken by a dominant social class or classes. The means by which this has happened have varied with economic circumstances.

In Ancient Slavery the process was obvious: the slave-masters led a life of ease without working, while the slaves received their keep. The surplus produced by the slaves over and above their keep belonged to their masters. In Feudal Society the process was obvious too: the serf was required to work so many days a year on the estate of his master. In Capitalist society too the surplus is taken by those who monopolise the means of production, but the process is a little more complicated.

Capitalist production is production for sale—what Liberman refers to as commodity production. In capitalist society everything, including labour power, is bought and sold. In fact capitalism is based on the exclusion of the majority of the population from the means of production. As a result the majority have to sell their working ability for a wage to the capitalists in order to live. On average this wage is about sufficient to maintain the worker in efficient working order.

The capitalist buys labour power for a day or week or a year, as the case may be. For part of this time the worker reproduces his own subsistence; the rest is free labour time, from which profits are derived. Profit arises in the process of production. The capitalist realises his profit when he sells what his workers have produced. In fact the sharing out of the social surplus among the capitalists and their hangers-on is more complicated than this, but the basic fact remains. Profit is taken from the working class in the process of production; this is the form in which the capitalist class take the surplus Liberman talks about. Because they monopolise the means of production the capitalist class are just as able to take this surplus as were the slavemasters and feudal barons.

The hard-headed businessman doesn’t see the origin of profit in this way. To him it appears as a surplus over his costs. He knows that if he reduces his costs he has a chance of increasing his surplus. Thus to him it appears that he can make profits by eliminating waste and cutting down costs, in short through efficiency. True, under certain circumstances, he can increase his share of profits in this way just as under other circumstances he can increase it by reducing wages or raising prices. But he deludes himself in seeing here the origin of profit. George Brown shares this delusion. So does Prof. Liberman, when he tries to tell us that in Russia profits arise from efficiency. In fact, of course, profit there as elsewhere arises from the surplus labour of the working class. This Liberman can’t—or won’t—see, but then he is after all an apologist for the system of exploitation in Russia.

Liberman’s views on profit lead him also to a false theory as to the origin of his “capitalist” profit. He suggests that such profit arises from depressing wages and from raising prices. Once again, a particular capitalist may temporarily increase his share of total profit in these ways but the point at issue is not this; it is what is the source of the total profit itself. Under capitalism profit arises even if wages are equal to their value and even if there are no monopoly elements present. Liberman’s argument about profits arising from efficiency is a familiar defence of capitalism.

Profit then is a form of theft. In Britain we have many robbers fighting over their shares in the legalised robbery of the working class. At present there is an argument as to who is entitled to what. George Brown is suggesting that those who get a share through using market power don’t deserve it. Enoch Powell, on the other hand, says that every capitalist is entitled to what he can grab. This is no argument in which Socialists can take sides: in our view the entire social product should belong to society as a whole. Then profit will disappear for ever and the surplus that arises from the labour of all will be used for the benefit of all.

In Russia there is one grand larcenist; the State. Till now the State has taken the surplus product of the working class more or less directly. Profit in this sense has long existed in Russia; it is not something new, as some discussions of trends in the Russian economy suggest. What is new is the reliance on supply and demand, and on profit on capital investment, to determine what amount should be produced. The market is gradually taking over from State directives. This changeover creates problems.

“Socialist” unemployment

In a State-directed economy, such as Russia had for a time, the labour force can be more or less fully used through coercive means such as restrictions on travel or on changing jobs, involving the issue of passes and cards of various sorts. This in fact was what did happen in Russia. Now this has been slightly relaxed, allowing a drift from the country to the towns, creating that chronic capitalist problem, the housing shortage. Thus at the 22nd Party Congress nearly four years ago, Krushchev admitted:

“We still have a housing shortage, the housing problem remains acute. The growth of the urban population in the USSR during the past few years is considerably in excess of estimates.”

Another problem which the Krushchev government had to face was that of large-scale seasonal unemployment on the land. Agriculture in Russia is very backward and very few agricultural workers are paid a steady wage; most in fact are not paid any money at all. In the winter these people are unemployed. Edward Crankshaw of The Observer, in a discussion of this problem in the issue of April 4, writes that a campaign to deal with this problem has now been launched.

“According to Sovietskaya Rossia, which is sponsoring this campaign, there are now well over 10 million collective farmers unemployed each winter—or over a third of the total number of able-bodied workers on the land—and the number is rising. Nothing was done about this under Khrushchev. Nothing much has been done yet. But the fact that a newspaper is permitted to campaign for State assistance in the development of local handicraft industries to keep the peasants in winter is very much a sign of the times.”

Socialist Profits, and now a Socialist Housing Problem and Socialist Unemployment—what next can we expect from the Workers’ Paradise which Russia is supposed to be? The return of our old friends the Soviet Millionaires, perhaps?

The "Public Money" Front

There is another example of the ignorance of economics shown, by the Daily Worker, Russian economics professors and other admirers of Russia, which must be recorded. It is taken from a letter by a leading member of the so-called Communist Party in the South Midlands to a local paper. Apparently he had met a member of the Socialist Party who tried to explain to him that ultimately the burden of taxation fell on the propertied class. This, he wrote,

“. . . is a prize example of the distortion of socialist ideas into nonsense. As if capitalism, under which we live, had not developed a capitalist state! As if that state were not strong, and the buttress of the exploiting employers! As if the state machine did not organise a complex set of attacks which working people have to resist, whether fighting for higher wages, shorter hours, moderate rent, decent pensions or equitable taxes and better government expenditure! The entire future of Oxford, with the Development Plan and the crying need for improved schools and social services, depends on the all-round struggle for the right use of public money.”

There is not space to go into this in detail; we only record this as in our view the prize example of the distortion of socialist ideas. It confirms that a correct understanding of political economy is a necessary prerequisite for correct practice. One thing is puzzling though : why only “moderate” rents, why not low rents or for that matter no rent at all? Why only “decent” pensions and “equitable” taxes? Surely “high” pensions and “low” taxes would gather more votes? Marx considered the demand of a fair day’s wages for a fair day’s work conservative, but this is almost revolutionary compared with some of the demands in the letter. After all, even Gladstone would have favoured “an all-round struggle for the right use of public money”.

Adam Buick

The Capitalist Class. By Karl Kautsky (continued). (1908)

From the May 1908 issue of the Socialist Standard

Continued from the March 1908 issue.

Specially translated for the Socialist Party of Great Britain and approved by the Author.

3.—Profit.

Now whence does the capitalist class draw its income ? The owners of merchant’s capital and usurer’s capital derived their profit and interest originally by way of deductions from the property of persons dependent upon their assistance and mediation, and belonging to various sections of the community. The owners of industrial capital, however, obtain their profit by exploiting the propertyless wage-workers. But as the capitalist mode of production develops, so industrial capital gains the ascendancy over other kinds of capital, and subjects these to its service, as we have seen. This, however, is possible only by assigning to merchant’s and usurer’s capitals part of the surplus-value wrung from the wage-workers. Owing to this development the surplus-value produced by the proletarians became to a greater degree the only source from which the entire capitalist class derive their incomes. Just aa handicraft and peasant agriculture lose in economic significance and decreasingly influence the character of present-day Society, so do the old forms of merchant’s and usurer’s capital, which obtained their profit from the exploitation of non-capitalist sections of the community, lose their importance. To day there are already States without handicraft and peasantry—England for example. But none of the modern States is thinkable without the great industries. Anyone desirous of understanding modern forms of capitalism must start from industrial capital. It is in surplus-value, which is produced by capitalist industries, that is to be sought the most important and increasingly prominent sources of all profit.

We have in the previous chapter become acquainted with surplus-value, which is produced by the industrial proletarians and appropriated by the capitalists. We have also observed how the amount of surplus-value produced by each worker is increased by adding to the worker’s labour burden, by the introduction of labour-saving machinery and cheaper labour, etc. At the same time with the development of capitalist industry the number of the exploiters proletarians grows and the amount of surplus-value going to the capitalist class increases by leaps and bounds.

But as, unfortunately, “life’s joys are vouchsafed unmixed to no mortal,” the capitalist class have to divide their surplus-value, although this dividing is most hateful to them ; they must part with portions to the ground landlords and to the State. And the share taken by these two partners grows from year to year.

_________________

4.—Ground-Rent.

When we talk about the sections of the community who are becoming more and more the sole owners and exploiters, the monopolists of the means of production, we must distinguish between capitalists and landowners ; for the land is a means of production of a peculiar kind. It is the most indispensable of all: without it human activity is impossible. Even navigators of the sea or air need a point of departure and landing. But the soil is also a means of production incapable of increase at will. Yet until now it has not happened in a large area that every bit of soil has been cultivated by its inhabitants. Even in China there are still large plots of uncultivated laud.

Under the domination of peasant proprietorship in Europe during the middle ages the peasant owned his farm and agricultural land. Water, woodland, and pasture land were communal property, and uncultivated soil was so plentiful that everybody could be allowed to take possession of and cultivate such land as he had begun to bring into cultivation from the wilderness. Then commenced the development of commodity production with the consequences of which we have already become acquainted. The products of the soil became commodities. That reacted on the soil, which was also made a commodity possessing value. The single peasant communities and associations now endeavoured to restrict the circle of their members, and the latter began to regard the land they owned in common and partly (as in the case of forests and grazing land) also used in common, no longer as common property of the community and therefore inalienable, but as a kind of joint private property belonging only to the existing members and their heirs; property from which all members who subsequently joined the community were excluded. They were desirous of making the land a monopoly. But someone else came to covet the property of the community, namely, the feudal lord, who had been the protector of the common property. If this property in land, that had become so valuable was to be made private property, then he was anxious that it should pass into his possession. In most directions, especially where agriculture on a large scale was developed, the feudal lord succeeded in seizing the peasants’ common property. Peasant-hunting, the driving of some peasants from their homesteads, followed. Nearly all the soil, even that not under cultivation, now passed into private possession: the ownership of land became the privilege of the few. Thus owing to the economic development, particularly to the formation of large property in land, the soil had become a monopoly long before the existing area of cultivation was exhausted, and much before over-population could have been talked about. If, therefore, the land occupies an exceptional position as a means of production because it is incapable of being increased at will, that is not in consequence of all the available soil being already under cultivation, but is due to the fact—at least in civilised countries—that it has already been taken possession of by a minority. There a monopoly of quite a peculiar character arises. While the capitalist class has a monopoly of the means of production, there is within the capitalist class no monopoly of certain means of production by certain members of that class—at least, no permanent monopoly. Whenever a ring of capitalists is formed for monopolising a certain important invention—for instance, a new machine—other capitalists may always come along, who could also purchase this machine, or surpass the same by meariK of a new invention, or imitate it sooner or later. All this is impossible regarding property in land. Landowners have a monopoly not only as far as the non-possessing class is concerned, but also from the standpoint of the capitalist class.

The peculiar character of property in land is developed most acutely in England, where a small number of families bave possession o£ all the land, to which they hold on firmly and do not sell. Who ever requires land obtains the same on lease for a certain rent called ground-rent. (Strictly speaking, “rent” ard “ground-rent” are not synonymous. “Rent” generally includes a portion of interest on capital. For our purpose here, however, “rent” and “‘ground-rent” may be used as identical terms.) A capitalist desirous of having a factory or dwelling-house built, or of establishing a mine or a farm in England, cannot as a rule, purchase the land, but may only rent the same on lease.

In Germany the capitalist is mostly also the ground landlord ; the manufacturer owns the land upon which his factory stands ; the mine proprietor is also the owner of the land in which the pits are sunk ; while the owner of large tracts of agricultural land on the continent of Europe cultivates the same mostly on his own account instead of letting it to a farmer. When the capitalist carries on agriculture on his own soil, when he himself is ground landlord, he need naturally not share his surplus-value with another, But that does not materially alter the case; for he has, generally, only become ground landlord by paying to the previous owner of the farm a capital, the interest on which corresponds to the amount of ground-rent. Hence he pays the ground-rent anyhow, and in the one form as in the other it diminishes his profit.

But the monopoly character of landed property becomes more acute, the stronger the demand for land grows. As population increases, so the capitalist class become more in need of property in land. To the same extent ground-rent grows, that is to say, the total amount of ground rent paid in capitalist Society. The ground-rent of every farm need not increase. A farm yields under otherwise equal conditions the more ground rent the more fertile and the more favourably situated (lor instance, nearer to the market) it happens to be.

Into the laws of ground-rent we can, of course, not enter here. The opening up of new and fertile land can therefore cause the ground-rent of exhausted soil to go down ; the ground-rent of newly opened-up land will, however, only grow so much the more. Thus improvements in the means of transit may depress the ground-rent of a nearly situated area in favour of a more distant one. Both cases have happened during the last two decades. American ground-rents have risen, and indeed (in so far as agricultural protective tariffs have not acted in an opposite direction) at the expense of West European ground-rents. This, how ever, only applies to land used for agricultural purposes. In the towns ground-rent is everywhere rising most rapidly ; for the capitalist mode of production drives the great mass of the population more and more into the towns. Unfortunately, by this aggregation the profit of the industrial capitalists suffers nothing compared with the growing physical and mental degeneration of the toiling masses. And here we encounter the housing of the workers as a new source of their sufferings; but this is not the place to enter into that.

(To be continued)

Finance and Industry: Who creates wealth? (1967)

The Finance and Industry Column from the October 1967 issue of the Socialist Standard

Many people have a shrewd suspicion that the profits that find their way into the pockets of those who own stocks and shares come out of the wealth produced by those who work. For the capitalist class this is unfortunate since their system runs on profit. To pursue their profit-making in peace they must convince the rest of us that they are doing it for our benefit; they must brand those who link profit with exploitation as ignorant agitators. Sir Peter Runge, a joint vice-chairman of Tate and Lyle and a director of Vickers, in a speech last May, later published by millionaire Labour MP Robert Maxwell’s Pergamon Press under the title The Role of Profit, had a go at showing that profit does not come from the unpaid labour of those who are employed to work. Here is his specious argument:

Let us look at profit in its first role — as an incentive to create capital, without which economic growth is impossible. Capital can only be created by savings, that is to say by the postponement of consumption. Under a voluntary regime consumption is postponed if it is judged that in doing so there is a consequential advantage. Judgement normally rests on the prospects of having more to consume as a result of the postponement; and clearly the better the prospects the greater the incentive to postpone consumption and thus to save. The extra consumption made possible by having waited is the reward for having saved; it is the profit generated by the capital which has been created. Without the reward there would be no capital formation and therefore no growth and therefore no real increase in standard of living or in real wages. Looked at in this way, the reward of capital — I am not talking about usury — exploits no one; it is an essential part of growth in a free economy.

This seems plausible until you take it to pieces. Take the sentence “capital can only be created by savings, that is to say by the postponement of consumption”. What does Runge mean by capital? We doubt, somehow, that he is using it in the Marxian sense to mean wealth used to exploit wage-labour for profit. Nor does he seem to be using it in the more conventional sense of academic economists to mean wealth used to produce more wealth. He seems merely to mean wealth that is not consumed immediately. In which cases his sentence is not a statement of fact but a definition that capital is postponed consumption. He argues that profit is needed as an incentive to save. In fact, he’s not really talking about profit, properly so-called, at all but about interest, the price of money. To talk, as Runge does, about rewards is just to confuse the issue.

We can assume that Runge is not so stupid as to think that money automatically reproduces itself. Or can we? What are we to make of his claim that “the extra consumption . . . is the profit generated by the capital which has been created”? Perhaps he can explain just how capital (in his sense) produces profit. Since he has defined capital as what is saved, and thus talks interchangeably about the “reward for having saved” and the “reward of capital”, he would seem to be committed to the patently absurd view that profit is produced by waiting. But waiting produces, and can produce, nothing. Waiting, in fact, is doing nothing. If Runge doubts this, let him take a sum of money and lock it up in his safe and wait. We can assure him that he will be waiting a long time before his reward materialises. On the other hand, he could lend it to someone who would use it as productive capital. The factory-owner who borrows the money will use it in his business. In his factory people in his employ will work raw materials into finished goods; they will produce new wealth. Part of this will return to them as wages. The rest belongs to their employer, the factory-owner. This is the source of profit and its subsidiaries, rent and interest. It arises in production from the unpaid labour of those who work. Out of his profit the factory-owner can pay Runge interest for the loan of his money.

Significantly, Runge chooses to steer clear of the realm of production and to discuss instead how interest can be justified. And even here, instead of seeing interest as a price he speaks of rewards, substituting for an economic category, as Marx put it in another context, a sycophantic phrase.

Another capitalist who has an even more absurd view of how wealth is produced is Tory shadow Minister, Sir Keith Joseph. He thinks it is a few thousand top executives who are the “wealth-creators”. In a speech pleading for a reduction of taxes on the rich, as reported for their benefit in the Financial Times of June 26, he declared:

The Government that wants the standard of living to rise so that there is more for all … must start by allowing its wealth-creators to keep more of their earnings. . . . There are at any given time very few wealth-creators probably no more than a few thousand.

We know that capitalism develops social productivity but had not realised that it had gone quite this far. So only a few thousand people mine all the coal, operate the railways, run the factories, shops and offices! Who are they? Who are these super-men? According to Joseph this fantastic feat is performed by

the creative businessmen who detect new needs and new markets or new versions of old needs and old markets for products or services — and set about supplying them; or the managers who have the brains, character and drive to make an organisation more efficient.

Runge tries to confuse us with his illogical arguments. Joseph just insults our intelligence. Nobody would deny that top executives work, but what about the rest of us, who spend the greater part of our lives in producing wealth that belongs to a privileged and often idle few, do we not create wealth too?

Incidentally Joseph, a Lloyds underwriter and deputy chairman of Bovis Holdings Ltd., hit upon an idea to create wealth for himself (and, of course, for us as well) that never fails. He had the enterprise, brains, character and drive to be born the son of one of the original partners of a construction firm called Bovis.

Why many people look up to men like Sir Peter Runge and Sir Keith Joseph is difficult to understand. They are just human beings like the rest of us, only, perhaps, a little stupid. It is us, the working class, who by applying our energies to nature-given materials produce all new wealth; it is us who run industry and society from top to bottom. Is it not time we did so in our own interests for a change?

Adam Buick

Notes by the Way: Starvation as an Incentive. (1941)

The Notes by the Way Column from the June 1941 issue of the Socialist Standard 

Starvation as an Incentive.

Correspondence has been going on in The Times as to whether it is possible to run industry without the profit motive. One contributor, Sir Francis Lindley, maintained that the great majority of the human race, when not enslaved, have worked for profit. To which Mr. Julian Huxley replied, pointing out (April 29th, 1941) that “the great majority of men in primitive societies worked for subsistence, and in advanced societies for wages or salaries.”

Some remarks made recently by Mr. Bevin, Minister of Labour, have bearing on this capitalist illusion that workers work because of the prospect of making a profit. Speaking in the House of Commons on April 2nd, Mr. Bevin referred to an M.P. who had said that industry relies on the power of dismissal to maintain discipline. Then he continued : —

“What does that mean ? It means that there is an economic drive on the workman to work, the ability to force your will on another by the imposition of starvation, which inculcates fear and resentment in the other man’s mind. That means that the basic condition upon which your system is run has been starvation or the ability to make another citizen unemployed. Well, that has meant war.”

Speaking on the same subject in a broadcast to America, reported in the Daily Herald (April 26th, 1941), he claimed that experience had shown that an improvement takes place when the threat of the sack is removed: —

“A factor that is becoming apparent is you get better discipline and loyalty with fear of dismissal removed than you do by the threat of it.”

If this improvement can take place under existing conditions, it is an indication of what would be possible when, under Socialism, production is carried on solely for the common good.

The Sunday Express (March 30th, 1941) published a story showing the capacity of the workers to carry on production in the absence of the employer. The latter, an Italian, was interned for nine months, and while he was away ‘his British employees have been running his factory admirably.’ The absent employer, who has not yet been permitted to visit his factory, received a letter from his 200 employees assuring him ‘that they would carry on in my interests until I was able to take charge again.'”

He remarks: “They have done magnificently.”

* * * *

Why the Workers Save

The Times (April 21st 1941) published an article based on first-hand knowledge of the workers’ attitude towards the Government savings campaign. The writer comments on the fact that many workers save in order to be able to face the anticipated depression after the war. “A majority of the working-class expect hard times after the war,” he writes, and quotes a Bradford weaver, who said : —

“I think there’ll be a big slump. I was in t’last slump; it was a terrible time. People didn’t save anything. I was always telling them, if it’s only two or three shillings, don’t spend more than you need. If it’s anything like the last, God help them.”

The naive writer of the article is rather surprised to learn that the attitude of the workers towards saving is not like that of the capitalist: —

“It is only in a very few instances that a working man is putting by money as a form of capital accumulation, which will eventually enable him to invest in property or become a small trader. Most often saving is a form of insurance against known contingencies : marriage, sickness, death, unemployment, old age, hard times . . . even at the poverty level families frequently save, at the expense of their elementary subsistence needs . . . ”—(The Times, April 21st, 1941.)

In short, the capitalist saves out of his superfluity in order to accumulate capital; the worker saves out of his insufficiency in order to protect himself against capitalism and the capitalist.

* * * *

Re-assuring the U.S.A.

One of the questions Mr. Wendell Willkie kept asking while in this country was: “Is it true England is going Red?” The answers he received must have convinced him that he had been somewhat misinformed.—(News-Chronicle, February 25th, 1941.)

“To suggest Britain will go Communist, Socialist or Totalitarian, is fantastic.”—Lord Halifax (News-Chronicle, April 4th, 1941).

* * * *

Catholicism and the Social Order

In a letter to the Manchester Guardian (May I7th, 1941), a director of the Catholic Social Guild summarised the declarations made by the Papacy on social problems. He stated that it is 50 years since Pope Leo XIII protested against the maldistribution of wealth by which “a few very rich men lay upon the labouring poor a yoke little better than slavery.” Leo, and later on Pius XI, “laid the blame on economic liberalism and opportunist politics by which social and political relationships were divorced from morality.”

The Catholic Church nowadays, while condemning socialism, also condemns capitalism, and makes the claim that the Catholic proposals are a practicable and superior alternative. It is a fair criticism to point out that within the half-century since Leo’s declaration there have been long periods during which professedly Catholic governments have ruled over predominantly Catholic countries. Spain and Italy are two examples. Can it be said that these countries have been In any way superior to other capitalist countries from the standpoint of social relationship? The Catholic authorities in those countries did not get rid of capitalism and did not rescue the labouring poor from their yoke of slavery to the rich. Indeed, some at least of the Italian and Spanish workers have gained the impression that the Catholic Church was as much interested in maintaining’ capitalism as any of the non-Catholic governments.

As for the point about political relationship being based on morality, it is interesting to see The Times (March 1st, 1941) stating that the late King Alfonso of Spain, and the Spanish Dictator General Primo de Rivera—both of them Catholics—”had undoubtedly violated the Constitution of the Realm, and their enemies made a particular point of the fact that King Alfonso had broken his oath to respect it.”

Edgar Hardcastle

From Sweden: Are there enough resources ? (1977)

From the April 1977 issue of the Socialist Standard

Are the earth’s supplies of energy, ores and other raw materials coming to an end? Is a real society of abundance only a dream, impossible to realize because there are not enough resources to do it?

A yes-answer to these questions is a common assertion against Socialism.

It comes from people who think that capitalism is quickly draining the earth of its supplies of oil, forests, ores, etc. As Socialism cannot be built on a rubbish-heap it is impossible to establish according to them.

Instead of Socialism — a real society of abundance with free access to all that is produced — these people often talk about a return to “a simpler life” (as if the working class has ever had anything else).

It is true that because of its profit motive capitalism is misusing the earth’s resources so as to give rise to the fear that, by nuclear war or continued massive pollution, it really destroys the potential for abundance which is necessary for the establishment of Socialism. But it has not done that yet and this possibility only underlines the urgent need for Socialism here and now.

When Socialists are told that Socialism is impossible because of lack of resources, we reply that there is no direct connection between capitalism’s consumption of various raw materials and the standard of liv-

ing of the majority. Socialism will abolish all the waste connected with capitalism: no labour, energy or raw materials will any longer be wasted on banks, armament production, parking meters and the thousands of other articles which are only needed in a commodity-producing society.

Socialism will also be economical with the earth’s resources by only producing what is best. Instead of cheap consumption articles which will soon wear out, it will produce durable articles which will last.

Still many critics are not satisfied. “In any case”, they say, “it can only postpone the time when the earth has been emptied of its resources.” And they generally seem to think that this postponement will not be very long. Sometimes they are even producing “evidence” for this in the form of statistics over the world’s supplies of various raw materials and how long they will last with various paces of consumption.

In reality no one knows how big the earth’s absolute supplies of different raw materials are. No such investigation has ever been made. What has been investigated are supplies and resources which capitalism needs. And that is something very different.

A

s the daily newspaper Dagens Nyheter some time ago pointed out in the headline to an article (13th December 1976): “Ore or not — a question of price”. In the article we learn:

Nobody knows exactly how big supplies of ore Sweden has — or the world as a whole for that matter . . . Ore only exists when it is profitable . . . When one has once established the economic definition the difficulty of measuring the supplies of ore in the world is realised. It varies with the price.

The article mentions that a ten per cent. increase of the world market price for a certain ore sometimes can double the supplies — which in reality were in existence all the time.

In the north of Sweden, five miles west of Kiruna, there is a place called Tjarrojaka. Here researches have been made during the last years and the supplies of copper ore have been estimated at ten million tons and the supplies of iron ore at 52 million tons. “These deposits would have been sensational in Bergslagen [in the middle of Swedenl”, Dagens Nyheter points out, “but in Norrbotten they are worthless”. This is because of the higher transportation costs which mean that they can not be used profitably — and therefore will not be mentioned in official statistics over ore supplies.

What is true of the ore is also true for most other raw materials and resources, oil, coal etc. This is the way capitalism counts and must count. It is a further argument for not worrying about lack of resources and instead setting about to work for the task of establishing Socialism.

Ake Spross

Cooking the Books: Vice’s homage to virtue (2005)

The Cooking The Books column from the March 2005 issue of the Socialist Standard

At their annual “World Economic Forum” jamboree in the Swiss ski resort of Davos in the last week of January, the world’s political and business leaders vied with each other to strike an “ethical” pose. It was, commented one newspaper, a case of ethics with everything.

There is even a magazine called the Ethical Corporation. At the time of the Tsunami its Asia-Pacific editor, James Rose, was active in the Australian press. “Put profits aside in the rebuilding” read the headline of one of his articles, “Shareholders should let companies assist in the post-tsunami reconstruction” (Australian, 4 January). “Companies must look beyond the bottom line” read another, “Corporate leaders see only profits as important. They must change” (Melbourne Age, 7 January).

Shareholders in construction companies would be only too willing to let them assist in the rebuilding. In fact, shares in them went up in anticipation of juicy reconstruction contracts. But this was not what Rose had in mind. Supply lines for aid, he wrote, “could be usefully shortened if corporations went in and did more of the work themselves, gratis, under the direction of the charity groups on the ground”, and:

  “What we need here is for corporations to throw off the cloak of self-interest. The best thing they could do is to approach the situation as it now stands as if it were a legitimate business opportunity, apart from one important factor: they will expect no financial or brand rewards”.

It’s a nice thought. The skills and the techniques are there, there are people in need, so why not bring the two together without any thought of profit? But it’s not going to happen, because that’s not the way capitalism works or could ever work.

Capitalism is a profit-making system and capitalist corporations have no choice but to put profits first. Not because the top executives are selfish or greedy or insensitive but because that’s the economic logic of the system. Corporate executives are merely what Marx once called “personifications of capital” and capitalism is an impersonal economic mechanism of the accumulation of capital out of profits which those in charge have to apply irrespective of their personal opinions or preferences.

Rose is aware of what he is up against as he wrote in the same issue of The Australian:

  “What is a corporation? On one level, it’s a pure money-making machine. There is solid opinion to say that’s all it can be. Even if a corporation wants to be a paragon of the New Age, it is constrained by the fiduciary obligations to its shareholders. It is legally constructed to focus on its and its owners’ self-interest”.

That opinion is indeed solid, very solid. Corporations don’t seek to maximise profits just because this is laid down by the law, as Rose suggests. The law merely reflects the underlying reality of capitalism. It’s not the law that needs changing – it never will  be on this point – but the whole profit system that needs dumping.

The Profit System (2005)

From the May 2005 issue of the Socialist Standard

Very few people would deny that the present state of the world leaves a lot to be desired. Humanity staggers from one crisis to the next – from war to famine to slumps to repression . . . Capitalism has developed a huge productive capability but its social  organisation and relationships cause extremely serious problems and render it incapable of meeting the basic needs of its people.

A vast amount of the world’s resources is expended in the production of weapons of war, from bullets and bayonets to nuclear and chemical weapons. Alongside these weapons are the armed forces which every state organises, clothes, feeds, trains and deploys. This is a massive waste of human effort; it is all intended to be destructive and none of it to create anything useful to human beings.

In a world which could produce more than enough to feed and care for its population millions are homeless and tens of millions die each year because they don’t have enough to eat or for lack of proper medical treatment. None of this is necessary. It happens while farmers in Europe and North America are being paid to take land out of cultivation; from time to time even food that has been produced is destroyed or allowed to rot. This makes sense to the profit motive; in terms of human interests it is wildly insane.

The environment is increasingly under threat from pollution and from the destruction of some of its natural, ecologically vital features. We hear well-informed warnings of an ultimate impending disaster unless we act to eradicate the problem but these warnings are always met with the objection that to save the environment can be a costly, profit damaging business. Yet it is not necessary for industry and agriculture to pour out noxious effluents into the air, the earth, the rivers and the seas. They do this today because pollution is seen as being cheaper, which means more profit friendly and to a society where profit is the dominant motive for production that is justification enough to override human welfare.

These are a few examples of how capitalism works against the interests of the world’s people. In contrast, as the articles in this issue explain, socialism will have fundamentally different social relationships, motives for production and concepts about the interests and security of human beings.

All the programmes at present being advanced by the professional politicians for dealing with the problems of capitalism through reforms must fail because of their essentially piecemeal approach. They attempt to treat symptoms instead of going for the basic cause. That is why, after a century or more of reformism the problems the reformists claim to deal with are still here.

A far more radical, fundamental change is needed to create the framework within which they can be solved.

Markets are trash (2020)

From the WSPUS website

I’ve never wanted to restart a year so bad in my life. We lost Kobe Bryant, Trump almost started World War Three with Iran, and now we’re living in a real-life version of Contagion that’s got us on a trajectory rivaling The Great Depression – and we’ve barely entered the second quarter. 2020 so far has been absolute garbage. On the bright side, at least this pandemic is waking people up to the fact that markets are garbage too.  

I know that many people reading this may already understand what a market is. However, watching a YouTube video of Sam Seder debating a Libertarian before writing this made me realize that I need to clarify the meaning of markets before I demonstrate precisely why they are trash. 

The almighty Google sources their meanings from the Oxford Dictionary’s website Lexico.com, which defines a market as an area or arena in which commercial dealings are conducted. 

For example, someone voluntarily calling into a radio show for free doesn’t constitute a commercial dealing since no money or commodities have been or will be exchanged. However, the host monetizing the call later does constitute a commercial dealing with the entity that distributes it, assuming that entity is different. In other words, a market only exists when a commodity is directly exchanged for another commodity, whatever happens later. The commodity most commonly exchanged is money. Markets suck for a lot of reasons, but right now I’ll focus on the contradictions between effective and notional demand and supply, as well as on profit.  

Lexico.com defines effective demand as 

 the level of demand that represents a real intention to purchase a good by people with the means to pay.

In contrast, notional demand is the demand of people who want a commodity but are unable to buy it for some reason, like not having enough money or a ban. Effective supply is the amount of a commodity furnished on the market, as opposed to notional supply, which is the amount of a commodity that would be furnished on a market if there were no market constraints, such as below-average profit margins for the commodity or a ban. 

Another critical concept is derived demand, which Lexico.com defines as 

 a demand for a commodity or service which is a consequence of the demand for something else.

A good example is Nevada governor Stephen Sisolak ordering temporary closure of all non-essential businesses in the state to curb the spread of Covid-19. The order led to lower derived demand for public transportation since fewer people are traveling to work, drink at the bar, get a haircut, and so on.  

The Covid-19 outbreak itself is an excellent example of how effective demand and supply can lead to negative results. It’s widely believed that the Covid-19 pandemic started in November of 2019 as a result of consumption of bats or pangolins sold at the Huanan Seafood Wholesale Market – a live animal and seafood market in Wuhan, China that also sold the flesh and organs of various exotic wild animals, referred to as yewei or bushmeat. The other two major coronavirus outbreaks of the past decade, MERS and SARS – of which Covid-19 is a variant – are believed to have originated in bats as well. Although no one has found evidence of anyone selling bats or pangolins at the market, Covid-19’s genetic similarity to another coronavirus found in bats (see here) suggests that it did originate with them and was most likely transmitted to humans through an intermediate animal – widely believed to be a pangolin (see here). Considering that two thirds of the first 41 people hospitalized for Covid-19 had direct exposure to the market (see here), pangolins could have been sold there — under the table, since they are a protected species. Assuming that was the case, the effective demand for yewei, which is known to have already caused two significant outbreaks this decade, met with the effective supply of yewei. Markets can incentivize the supply of dangerous goods – for instance, bombs, the only use of which is murder, or infected meat, leading to a global pandemic like the one we’re dealing with right now.  

Another excellent example of the negative results of effective demand is the impact of Covid-19 on my hometown, Las Vegas. The town’s economy revolves around the Strip, which caters mainly to tourists’ and locals’ leisure activities. The effective demand for goods and services was drastically lowered on the Strip after stay-at-home orders were issued to curb the spread of the virus, causing a domino effect. The lower effective demand for goods and services on the Strip led to lower effective demand for labor on the Strip, causing many workers employed on the Strip to be laid-off. With their derived demand for healthcare coverage and housing coming from their employment, these workers being laid-off led, in economic terms, to them losing effective demand for healthcare coverage and shelter during the pandemic. 

I give kudos to Wynn Resorts for committing to pay all their employees through mid-May, even though it may only be because it would be too expensive and time-consuming to bring all their employees back if they lay them off. Still, I haven’t heard of any other companies committing to that. 

Thank god, also, that Governor Sisolak issued a moratorium on all evictions during the pandemic. Still, he did make it clear that any unpaid rents or mortgages would have to be paid after the pandemic, essentially postponing the homelessness of many Las Vegans to a later date.  

The absurdity doesn’t end there. A resident at St. Vincent’s – the town’s homeless shelter for men, where I happened to live for about a month – was diagnosed with Covid-19. As a result, they shut the shelter down until further notice as a “safety precaution” — meaning that they wanted to avoid legal liability if other residents got sick. Now they have as many as 500 residents sleeping outside in the parking lot of Cashman Center, sectioned off into “social distancing” boxes. And this is on the same street as hotels with thousands of empty rooms, which are now only a notional supply due to the ban on non-essential business. Even if that were not the case, these homeless men would have only notional demand for these rooms that could help curb the spread of the disease among them, because they can’t afford them anyway. They are basically leaving these residents out to die, since a vaccine may not be available until at least early 2021 – a vaccine for which they may anyway have only notional demand.  

Vaccines usually take 2—5 years to be ready for market, but the urgency of the pandemic has experts hoping optimistically that it can be done in 12—18 months. The long timespan is due partly to the complexity of the vaccine development process, but in large part also to the need for funding. Over 60% of vaccine research and development funding comes from for-profit companies (see here), which was a major stumbling block in the development of vaccines for SARS and MERS. For-profit companies tend to be hesitant to invest in vaccine development since it’s much more lucrative to invest in other medications. Even if they do invest, a pandemic may pass before they can get a vaccine to market – an outcome that they see as a waste of money. Publicly funded research would be subject to the same sort of prioritization, so the only way to guarantee that we develop vaccines promptly is to remove market forces entirely.  

In a socialist society there would be no markets, because there would be no money. Since production would be for use rather than for profit, vaccine research and development would not be dependent on securing investment. It would depend only on having the necessary resources at hand. We would not stop developing a vaccine just because a pandemic has passed; we would continue to develop it, so that we would have a head start in case a future pathogen arises with a similar genetic makeup, as with SARS and Covid-19. Since there would be universal free access to all products, we would have an incentive to stockpile a buffer of supplies so we can isolate ourselves for long periods if that is necessary in order to fight a pandemic. Since healthcare would be free, anyone could get tested, use a vaccine, or get a ventilator without impediment or significant delay. Our decisions would no longer be subject to the anarchy of the market, because we would finally have achieved coordinated cooperative control over production and distribution. 

Jordan Levi

Letter: A good question (2020)

Letter to the Editors from the April 2020 issue of the Socialist Standard

A good question

Dear Editors

If we can have full, global, satellite, wifi coverage why can’t we have full global housing for everyone, food for everyone, jobs for everyone, access to education for everyone, full coverage medical health care for everyone, etc? The reason is that it isn’t profitable to house everyone, and feed everyone… etc. Industry, money, and resources chase the profits and largely neglect needs. Is the solution to make providing for human need profitable or is it to design a system of society where human need is met regardless of profits? Whichever avenue of endeavour we choose, we should remember that ‘profit’ is a calculation on a financial balance sheet and doesn’t in itself necessarily supply any human need whereas a society based on satisfying human need should surely go some way to doing just that.

Louis Shawcross, 

Northern Ireland.

How We Could Live (2015)

From the April 2015 issue of the Socialist Standard

Already, working together, we produce a great deal of wealth. But most of us don’t get to see or benefit much from it. Imagine how much more needed things could be produced and useful services provided if the 200 million unemployed people in the world were allowed to work.

It is not laziness stopping them. The barrier is profit. The people who own the world’s factories, machines and tools must make a profit or they won’t hire. If we owned these resources together, we could use the fruits of our labour for our own benefit. We could share out the wealth we create together.

We wouldn’t need markets and the waste that goes with them. We could directly produce enough for all. We could save all the work and effort that goes with buying and selling and shuffling money around and instead create more of what we need. No more tax  collectors, benefit officers or bankers. It would be more efficient to simply share out our produce freely and according to need.

Working together, we can free up our time so we can take control of the communities where we live. We could have democracy at work too. We would be able to control the real decisions that affect all our lives. There would be no privileged, rich elite able to buy their way to influence and power

We need to organise ourselves to demand common ownership and democratic control of the productive wealth of the world. It will take all of us, standing together, debating, discussing and planning in order to make the change possible. It can be done.

First Things First (1961)

From the November 1961 issue of the Socialist Standard

There is nothing more that devoted well-meaning people could have done. Over the years they have altered, added and improvised to try to meet the requirements of changing knowledge and needs. But as it stands now. the structure of this early Victorian hospital has outlived itself and what the place really needs is to be pulled down and rebuilt.

Surely, ask the very innocent, that would cost too much money—there isn't enough of it about, you know? And this is echoed by many an "economic expert" who would deny any claim to naiveté.

Not enough money about? Stick your head out of the ward window and watch the giant machines tearing into wet London clay and the skeleton of a flyover taking shape before your eyes. Don't leave the window open too long, though—the drilling, bulldozing and blasting of the great new road development scheme must have a devastating effect on the poor patients. They did think about spending some more money on the scheme, to make it quieter and so easier on the patients' nerves. But in the end they decided that roads come first and sick human beings somewhere after that.

Perhaps many motorists agreed with this decision. Certainly, they grumble enough about the need for new roads and the amount of tax which goes into licences, petrol and so on. Yet they would be wrong to think that the flyovers, underpasses, motorways and the rest are built for their especial benefit and enjoyment.

Let us begin somewhere at the beginning. Our society is based upon private property, which means that a few people own the means of life. This leaves a lot of people who are virtually propertyless. and who therefore have to work for the few owners. In this work they create a surplus which must be sold so that the capitalists can realise their profits. These profits are used by and at the discretion of the international, wealthy ruling class.

This set up raises some tricky problems for the capitalists. Traffic jams prevent profitable goods being moved efficiently; they even stop workers getting to work on time, which means that they might not turn out as much surplus as they should. So traffic jams, in the name of profit, must go.

Again, if motor cars are to be stuck forever in jams and queues, a lot of potential buyers may decide to use some other form of transport. The motor car market is already none too healthy; if there was a developing hardness against the industry's sales jargon there would soon be panic stations in the plushy showrooms. So would there be in the al fresco salons on old bomb sites, where many workers obtain their latest model.

And what about that other great commercial group which has motoring interests clutched to its bosom? What of the oil companies? We all know that the noxious, smelly fluid can overnight turn a flyblown, sandy waste into a world danger spot. It has lined the pockets of shareholders all over the world, and enabled a handful of Eastern potentates to count their wealth in Cadillacs instead of the traditional camels. No need to point out that the oil boys think an efficient road system, with lots of cars using it, is very important.

These are the reasons why the excavators scrunch outside the hospital walls, and why ordinary, decent people think it right to put motor cars higher up the scale of values than sick and ailing human beings.

For sick workers contribute little, or nothing, to the profitability of capitalism. They are, in fact, an expense, which is covered by taxes on property, the National Insurance levy and philanthropy.

Capitalism can be attacked coldly, with fact and arguments on economics, history and the rest. This does not mean that we do not see through the cloying mess of moral standards and human values which capitalism foists on us. It is useless merely to try to be humane; for many an uphill struggle to implement a reform has been followed by capitalism's unhappy knack of encroaching upon the reform, when it clashed with some sectional economic interest.

No, we need a bigger change than that. Something to make human beings free and secure. We'll have roads under Socialism, and we will have sick people too. But both of them will be in their place.

Jack Law

Why the Greens are wrong (1994)

From the June 1994 issue of the Socialist Standard

People are right to be concerned about what is happening to the environment. Materials taken from nature are being transformed by human activity into substances which nature either can’t decompose or can’t decompose fast enough. The result is pollution and global threats such as the hole in the ozone layer and global warming.

There really is a serious environmental crisis. The issue is not whether it exists but what to do about it. The Green Party has one view. We have another.

The Green Party sees itself as the political arm of the wider environmental movement, arguing that it is not enough to be a pressure group, however militant, like Greenpeace or Friends of the Earth. Greens, it says, should organise as well to contest elections with the eventual aim of forming a Green government that could pass laws and impose taxes to protect the environment.

We say that no government can protect the environment. Governments exist to run the political side of the profit system. And the profit system can only work by giving priority to making profits over all other considerations. So to protect the environment we must end production for profit.

Pollution and environmental degradation result from the inappropriate ways in which materials from nature are transformed into products for human use. But what causes inappropriate productive methods to be used? Is it ignorance or greed, as some Greens claim? No, it is the way production is organised today and the forces to which it responds.

Production today is in the hands of business enterprises, all competing to sell their products at a profit. All of them — and it doesn’t matter whether they are privately-owned or state-owned — aim to maximise their profits. This is an economic necessity imposed by the forces of the market. If a business does not make a profit it goes out of business. "Make a profit or die" is the jungle economics that prevails today.

Under the competitive pressures of the market, businesses only take into account their own narrow financial interest, ignoring wider social or ecological considerations. All they look to is their own balance sheet and in particular the bottom line which shows whether or not they are making a profit.

The whole of production, from the materials used to the methods employed to transform them, is distorted by this drive to make and accumulate profits. The result is an economic system governed by uncontrollable market forces which compel decision makers, however selected and whatever their personal views or sentiments, to plunder, pollute and waste.

Governments do not have a free hand to do what is sensible or desirable. They can only act within the narrow limits imposed by the profit-driven market system whose rules are "profits first" and "you can’t buck the market".

The Green Party is not against the market and is not against profit-making. It imagines that, by firm government action, these can be tamed and prevented from harming the environment. This is an illusion. You can’t impose other priorities on the profit system than making profits. That’s why a Green government would fail.

Some Greens have already begun to realise this. Here is what Derek Wall, who was a national speaker for the Green Party in the last European elections in 1989, has gone on record as saying:

"A Green government will be controlled by the economy rather than being in control. On coming to office through coalition or more absolute success, it would be met by an instant collapse of sterling as "hot money" and entrepreneurial capital went elsewhere. The exchange rate would fall and industrialists would move their factories to countries with more relaxed environmental controls and workplace regulations. Sources of finance would dry up as unemployment rocketed, slashing the revenue from taxation and pushing up the social security bills. The money for ecological reconstruction — the building of railways, the closing of motorways, the construction of a proper sewage system — would run out" (Getting There: Steps to a Green Society).

The Green Party is right on one point though, when it says that pressure group activity is not enough. Where they go wrong is not in proposing political action, but in proposing political action to elect a Green government.

They fail to realise that what those who want a clear and safe environmental are up against is a well-entrenched economic and social system based on class privilege and property and governed by the overriding economic law of profits first.

If the environmental crisis is to be solved, this system must go. What is required is political action, yes, but political action aimed at replacing this system by a new and different one which will allow us to meet our needs in an environmentally-friendly way.

To do this we must control production — the way we interact with the rest of nature — but to be able to control production we must own the means of production. So we are talking about a system of society based on the common ownership and democratic control of productive resources.

That’s the only basis on which we can meet our needs whilst respecting the laws of nature. And it’s the only basis on which we can begin to successfully reverse the degradation of the environment already caused by the profit system.

What Greens should be struggling for is not a change of government but a change of society.

Adam Buick