Prosperity under “Protection”. (1909)

From the January 1909 issue of the Socialist Standard

Unemployment in New York State

	Idle Continuously for 3 months, Jan., Feb. & March.		Idle last day of March.
	Number	Per cent.	Number	Per cent.
1906	24,746	6.5	37,239	9.9
1907	65,642	13.8	77,270	19.1

1908  101,466                      26.3                    138,131                     35.7

Fortnightly Review, Dec., ’08.

Book review: Flies in the ointment. (1916)

Book Review from the September 1916 issue of the Socialist Standard

The New Protectionism, by J. A. Hobson, London. The Cobden Club, Westminster, and T. Fisher Unwin Ltd., Adelphi Terrace. 6d. Net.

That monumental piece of bluff and fatuity the Paris Economic Conference has been taken seriously, not by the German capitalists—-they are not entirely devoid of intelligence—but by the Free Trade apostles of this country. While almost everybody else has been laughing at the affair as a clumsy attempt to impress the mugs, not of the Germanic nations, but of the “entente” countries, the “economists” of the Cobden Club have been regarding the Conference as a sort of “red light,” and have even been moved in their trepidation to inflict upon an already sufficiently suffering world a 150 pages or so of very serious and solemn consideration of the matter.

That the recommendations of the Conference were ever seriously intended to be carried into effect after the war has been thought hardly worthy of space for discussion in these columns. It will be the wonder of the age if the “Allies” can hang together through all that they have yet to endure before they arrive at the goal of victory, or survive the conflict of interests at the settlement, much less bind up those clashing interests with fiscal bonds and the like. Those interests are by no means made one by the war. It is extremely doubtful, indeed, if those interests are unified even as far as a complete and crushing victory over the Teutonic powers.

Be it said at once that in the brochure under review the author adduces many cogent reasons why the attempt to carry out the recommendations of the Paris Economic Conference would be sheer idiocy. Having said that I have done with that side of the question. If any reader wishes to waste a tanner on those cogent reasons he has my gracious permission to do so, and incidentally he can have my copy for tuppence, with the comment chucked in that “the fool and his money’s soon parted.”

But if the Socialist is not concerned with the question of statesmen making asses of themselves by chewing “New Protectionism” thistles, he generally feels disposed to have a cut at bourgeois economics (!) when opportunity offers, and opportunity offers now.

Mr. Hobson opens thus :

“The policy of Free Trade is based upon a reasoned belief that all commerce is an exchange between the goods or services of one person and those of another, this exchange being usually effected by two monetary transactions an act of sale and act of purchase. both parties in such commerce are gainers from it: and their gains tend to be equal.”

Our author having firmly based his creed on the unshakable quagmire of an economic fallacy, proceeds to enlarge upon a “series of separatist fallacies,” of which

“the second is the separation of the interests of the seller from those of the buyer, and the false assertion that the interests of the former are, or ought to be, superior.”

If Free Trade is based upon the first-mentioned belief, then the Free Traders had better shut up shop, for the Protectionists have all the best of the argument. An exchange may be “two monetary transactions—an act of sale and an act of purchase” but there is a vast difference between the two. The seller of a commodity realizes profit, the buyer does not. The commodity is not produced for consumption, but for profit. This profit can only be realized by sale. The seller, then, is simply completing the process which finds its volition in the motive for all capitalist activity—the incentive of gain ; the lust for profit. Therefore, it is not true that both parties are equal gainers by exchange, and under the system the interest of the seller is the paramount interest.

As a matter of fact, of course, it is not at all necessary to believe that both parties concerned in an exchange benefit equally from it in order to become an advocate of Free Trade, and it is mere moonshine to say that the policy of Free Trade is based upon such a belief. The Free Trader who counts—the Free Trader among the ruling class—recognises the paramountcy of his interets as a seller, since he knows that in each cycle of his industrial operations—in which field the vast bulk of both his buying selling is done—he sells more than he buys, and this difference between what he buys and what he sells is the sole incentive of his buying and seeing at all.

He starts by buying raw material and labour-power, and he ends by selling the product of the combination of the two. And always, except in the comparatively rare instances where he has made a sad muddle of things, the amount of his sales exceed the amount of his purchases, else where does his profit come in ?

Free Trade is mainly the policy of the manufacturer who hopes to sell in foreign markets, and for these reasons : If he has to pay a duty on his raw materials he cannot recover it in the world market, hence he is handicapped as a seller ; i.e., he must either sell for more and consequently sell less, or he must sell for the same as has foreign competitors and himself shoulder the duty. In either case he realizes less profit. The second reason is that if his wage-workers have to pay a duty on their necessaries of life he, the employer, will have to pay more for their labour-power, and again when he sells his commodity he realizes less profit.

And now mark the working of the mind of the bourgeois Protectionist. He usually is producing for the home market. If he has to pay more for his raw materials because of a tariff, be can get that back in the protected home market, while if he has to pay more for his labour-power because of the tariff on his wage-slaves’ necessaries of subsistence, he calculates that the higher price and wider market Protection enables his commodities to enjoy will more than counterbalance that disadvantage.

The underlying motives, therefore, of both the Free Trade and the Protectionist policies are not any concern for the equality or inequality of benefit arising from exchange, but the desire to have established that system best suited to the economic of the individuals holding the respective views. And it may be said that the tendency is to protect the home market when that market is of greater importance than the world market, and to resort to Free Trade as the export trade is developed. In view of this we may expect to see a revivifying of the Protectionist policy as the development of the manufacture of the more backward countries brings about a relative restriction of the foreign market for every country.

In close connection with this phase of the question “Free Trade versus Protection” Mr. Hobson may be quoted again. He says on page 8 :

“If the Bradford weaver gets Protection and nobody else, he stands to gain. But if all other British trades, local and national, engaged in making articles he needs in his trade—e.g., wool, coal, machinery, dyes, etc.—or articles of food, clothing, furniture, on which he spends his wages, also get Protection, each duty to protect those other trades filches from him a bit of the gain he stood to make if the Bradford woollen trade were alone protected. A general tariff protecting all British trades equally would thus be found to make so many deductions from the value of the special Protection enjoyed by the woollen trade as to convert it from a gain into a loss. The higher prices of woollens which his Protection enabled him to get would be outweighed by the added higher prices of the various article required for use in his trade and for his private consumption.”

This, of course, is incorrect, as is easily demonstrated. Let us suppose “a general tariff protecting all British trades equally to the tune of, shall we say, 10 per cent. Our Bradford weaver buys “wool, coal, machinery, dyes, etc.” (much of which being home produce, he would not have to pay any duty on) value say, £100 prior to the tariff. He then purchases labour-power of the pre-tariff value of say £50. Even if we assume that the whole of the material had been subject to the tariff, and the labour-power had been produced entirely upon duty-bearing substance, the Bradford wearer would hare to pay on account of the tariff 10 per cent. on only the amount of his outlay, £150. But when he came to sell his commodity in the home market he would find his foreign competitor penalised to the extent of 10 per cent. of the full value of the commodity, which would he, say, £200. So against an penalty of 10 per cent. on £150 the Bradford weaver finds he has increased opportunities (so long as he sells in the protected market), in the way of increased sales and higher prices, equal to 10 per cent. on £200. “His private consumption” is by no means sufficient to materially affect this argument.

Again, on page 6, our author talks through his hat. He says of the Protectionist :

“He makes his separate appeal to the man as producer, tells him that selling is more important than buying, and that the money he receives is more important than what he can buy with it.

It is through consumption that the co-operative nature and value of commerce is realized.”

The crux of the whole matter is, who does the Protectionist appeal to, or, for that matter, who does the Cobdenite appeal to ? If to the capitalist, then it has already been shown that the capitalist is far more of a producer (in the controlling, not the operative sense) than consumer, and that it is to production that he owes all he possesses, which he realizes through the act of selling. It is logical, therefore to appeal to the capitalist as a producer, and both the Protectionist and the Free Trader are found to do so in the last analysis. Even Mr. Hobson does so when he says, “the higher prices . . which his Protection enabled him to get would be outweighed by the added higher prices of the various articles required for use in his trade.” On the other hand, if the appeal is to the workers, then it is about as logical to appeal to him as a consumer as it would he to try to interest a horse in the cost of his forage. Mr. Hobson assents to this when he states that the higher price of the worker’s “food, clothing, furniture, etc.,” “filches . . a bit of the gain” from the Bradford weaver.

There are plenty of other fallacies in the book under review, but I have room only to deal with one or two more. Mr. Hobscn says on page 4 that

“The notion that the expansion of foreign markets obtained within the last two decades by German or American traders is a corresponding loss to British traders is sheer nonsense. To a large extent those markets were “created” by the special economic and commercial activities of the German or American trader. For the rest, an enlargement of our foreign markets which, in default of German or American competition, might have taken place, would have involved a diminution of our home markets.”

What a conception of the capacity of the commodities market ! And what a conception of the modern capitalist power for production ! Mr. Hobson says it is a falsehood to represent the commercial competition between two nations as “a struggle between two nations for a limited amount of profitable foreign market.” He declares that “There is no such absolute limit to quantity of foreign market.” Yet our author admits that there is competition. It would be interesting to hear Mr. Hobson’s explanation of what that “commercial competition” is for, and how it arises. Nobody competes for that which is (in the practical sense) unlimited. It is limitation which is the very foundation of competition.

And then mark the ludicrous suggestion that it is productive capacity that is limited in that statement, “an enlargement of our foreign markets . . . would have involved a diminution of our home markets.” The army of unemployed means nothing to Mr. Hobson : the factories working short time or closed down are without significance to him ; the periodical crises, when the warehouses are choked with goods which can find no outlet in any market, at home or abroad, make no impression on his mind. One can go on producing to any extent, in our author’s view, and the problem of markets will solve itself. If the market does not exist you simply “create” it. The only danger is that, if you “create” much “foreign market” the home market will have to go short because capitalist production is so inelastic that it cannot respond to the call for expansion.

A. E. Jacomb

Fiscal fatuity. (1908)

From the September 1908 issue of the Socialist Standard

Mr. Chiozza Money is a ‘cute man ; but he nods at least as often as Homer. Just now he is engaged in making “One Hundred Points for Free Trade,” or rather, one hundred points against Protection, in the Daily News. This is one of them :

“The Protectionist theory is that imports, especially imports of manufactures, cause want, unemployment, and pauperism.

Well, every year India imports large quantities of manufactured goods, and nearly all of them are imported from the United Kingdom.”

***

Mr. Money might have found—it would have been a difficult job, but he might have found—a happier example. In India the people die literally like flies from “want, unemployment, and pauperism” and their results. The onus is on the Free Trader to explain the absolute unredeemed impotency of Free Trade in “our great dependency.”

***

The Protectionist is of course in no better case. He has to explain why “want, unemployment and pauperism” are rampant in every industrial country where his pet nostrum is in operation. Protectionist and Free Trader are alike unable to face the facts. They have to resort to all sorts of mean and pitiable dodges to escape facing facts. From a working-class standpoint there isn’t the worth of a tinker’s anathema between them or their precious systems.

***

Poverty is the result of certain definitely ascertained causes. Fiscal schemes do not remotely affect those causes. The workers are poor because they have no control of the product of their labour and are, therefore, robbed of the great proportion of it. Free Trade or Protection may, in certain cases and under certain conditions, result in a particular trade or trades receiving a fillip. To that extent there might be more work available. But that would also necessarily mean more robbery. And the workers are poor because they are robbed.

***

Besides, the fillip must in the nature of capitalist things die down. Supply would overtake and outstrip available demand. There is not a single commodity in general requisition that the present machinery of production could not satisfy the effective demand for several times (often hundreds of times) over. Given the fillip and competitive machinery would be working at breakneck speed to be first in the market with the goods. Result : overproduction, slump, unemployment, starvation and the miseries necessarily attendant thereon.

***

The process is characteristic of free trade and protected countries indifferently. If the worker is employed he is robbed. That is the unalterable condition of his employment. He must make a profit for his master. If he is not employed he starves. In either case he is no more than a pawn in the competitive game. He is dependent upon the fluctuations of the market—upon the employer who works him at top speed until he has produced too much, and then throws him off until the surplus is exhausted.

***

The waste, necessarily the accompaniment of this competitive game, is only obviated under capitalism through monopoly. With one source of supply the output may be regulated to the demand. But Free Trader and Protectionist alike shriek (publicly) against monopoly, and howl dismally against waste. They are just mean dodgers or abnormal ignoramuses—they want to eat their cake and have it. The trust (monopoly) is the perfection of production. The trust stage is inevitable. It will produce most economically. It will save labour. It will mean more unemployment. And it is inevitable—Free Trade or Protection notwithstanding.

***

Mr. Money’s note has lured me into an article. I am sorry ; but I am a victim of circumstances. I intended no more than a par. But the fiscal folly of the Free Trade Moneys and the Zollverein Wilsons always cause me to curse privately and slam publicly. They are so dam silly ! The whole point is that “want and unemployment and pauperism” are inevitable under capitalism ; that although Free Trade or Protection may conceivably give an impetus to a certain trade it cannot absorb the available labour, and even if it could, labour would still be robbed ; that there is no explanation of the poverty problem other than that given by the Socialist; that there is no solution other than that offered by the Socialist.

***

The working class of every capitalist country in the world is in a state of chronic “want, unemployment, and pauperism” because it does not own the wealth it alone produces. It doesn’t own the wealth because the land and machinery of production are owned by the capitalist class. It never will own its product until it owns and controls this land and machinery. And it never will own and control the land and machinery until it thoroughly understands its own position and the conditions of change, and has organised its forces for the specific object of effecting that change.

***

The work of the Socialist Party as against Tariff Reformer, Social Reformer, Fiscal Laissez Faireian, or what not, is, therefore, the education and organisation of the working class for the overthrow of capitalism through the capture of the powers of government in order to secure the product of labour from being annexed by the capitalist class. Virtually the working class is in possession of the machinery of production since the whole process from top to bottom is in working-class hands. The workers now require to assert their possession and secure it, and at the same time the result of their toil, by the control of the fighting arms through political conquest. Simply that.

Alegra.

The slimy trail. (1908)

From the June 1908 issue of the Socialist Standard

The flight of the wealthy exploiter into the Tariff Reform camp is causing consternation in Liberal circles. Not because the Liberals are thereby losing brilliant advocates for the forlorn hope, but because they are losing and will lose the funds wherewith to purchase professional agitators from the ranks of the intellectual proletariat which capitalism produces in such large numbers and who are compelled, in order to fill their bellies, to prostitute their talents in aid of any cause the votaries of which are able and willing to pay for their services.

The politically bankrupt Liberal Party, then, finding itself in this position, sets out through its Press, in a series of lachrymose articles, to arrest the stampede and to justify the departure from “Cobdenism” in the “economic sphere” and its unfaltering adherence to the free imports fetish. Says the official organ of the “great party” in a panic screed,

”Mr. Chamberlain used to taunt Liberal Free Traders with inconsistency for accepting Cobden’s fiscal policy but rejecting his policy of laissez faire in matters of factory legislation. Mr. Asquith long ago disposed of this point by showing that the two things are essentially consistent. The object of government in the economic sphere is, he said, to secure the best application and distribution of the productive powers of the country. Fiscal ‘protection’ is opposed by free traders because it interferes with that object. Factory legislation is supported by liberals because it conduces to it, since sweated labour is, in the long run, labour uneconomically employed.” (Italics mine.)

Here the reformer himself points to his cloven hoofs, for, shorn of its euphemisms, the foregoing excerpt exposes the sordid motive that first, last, and always actuates the Liberal wing of the capitalist House of Commons. Laissez faire, in the economic sphere does not pay, so overboard it goes. Cheap bread means cheap wage slaves, so the capitalist will spend the last drop of his apoplectic blood to keep the people’s food untaxed. Sweated labour is labour uneconomically employed, so the Liberals will assist their Tory collaborators in preventing titled owners of chemical factories from importing big, raw-boned sons of Anak, standing six feet three inches in their socks, from Erin, and murdering them inside of twelve months. They must take three years to “do them in.” Hence the agonised tears of the humanitarian over phossy jaw, potter’s rot, wrist drop, baker’s foot, and other loathsome diseases which make up the “majesty of labour.” The less astute capitalist is aghast at seeing his liberty to slay for profit restricted in this manner. He is slow to learn the lesson mastered by successful soap-boilers and cocoa fakers that there is money in applied humanitarianism and cheap and telling advertisement in model villages and garden cities, and so the capitalist hack must perforce point out the real motive for all great reforms and “workmen’s charters.” In effect, he says to his paymaster, “Play the game, old man, play the game. Let the cry of the oppressed go up. Let your Carlyles write their flapdoodle on the ‘condition of England question,’ your Ruskins their ‘Fors Clavigera’ and such-like ‘tripe.’ Weep over the ‘cry of the children’ and the ‘submerged tenth.’ Subsidise all and sundry. But keep the people away from the Socialist. He alone endangers the citadel of King Capital. Keep the minds of the working class diverted from Socialism and all is well for Capitalism.”

It is said that in the Chicago stockyards nothing is wasted except the squeal of the dying hog. The British capitalist politician beats even that. Indeed, he finds a trump card in the groan of the famished, half-naked, shivering child ; in the wail of the widow ; in the suppressed complaint of the scrapped wage slave who is a driveiling old dotard at forty-five, babbling, not of green fields a la Falstaff, but of his exploits when stripped to the waist before retort or furnace. All can be turned to account for the further advancement and consolidation of Capitalism ; all can be used to side-track the working class from the main line to emancipation.

It is suddenly realised that it is unprofitable to wear out the workers so quickly. Immediately the capitalists’ henchman of press, platform and pulpit bellow forth the dawn of a brighter era for the factory slave by adding still another “Workmen’s Charter” to the Statute Book in the shape of elastic Factory Acts. It is found, owing to the starving of the infant proletarian, that a sufficiency of cannon fodder cannot be obtained—the wage slave is degenerate and inefficient, and so the children must be fed. Did not the great white Christ command “Feed my lambs” ? The young idea is so trained that it can draw up false balance sheets and lying prospectuses, tot up accounts and label merchandise with more or less false descriptions. It is taught that the despicable vices of thrift, prudence, and resignation are cardinal virtues, that the more servile he is the better citizen he is, and that the religion of cowardly slaves—Christianity—is the very acme of morality, and if he will only subscribe to it he will one day have a halo round his feet. This is called education. And to achieve its purpose Capitalism astutely enlists in its service all the sentimentalists, freaks, and cranks with which mankind is cursed. All the churches, friendly societies, philanthropists, co-operative societies, trade unions, and pseudo Socialist organisations. The slimy trail of the capitalist serpent is over them all. Tariff Reformer and Free Trader, Home Ruler and Labour Leader, Sacerdotalist and Passive Resister, Malthusian and Mormon, Suffragette and Social-Democrat, Temperance man and Anti-gambler, Secularist-ethicist and morality mongers generally—all are playing the capitalist game, consciously or unconsciously. All are attempting to mould the plastic working-class mind on the potter’s wheel. The one party that stands out in bold relief against them all is The Socialist Party. That alone points the road to emancipation and exposes all reforms for the tinkering ineptitudes they are. Hail the Social Revolution !

W. Watts

Cooking the Books: The King of Tariffs (2025)

The Cooking The Books column from the May 2025 issue of the Socialist Standard

‘Trump often cites the “gilded age” of William McKinley, the late 19th-century president, who imposed tariffs at an average rate of 50 percent to protect the domestic farming sector from foreign competition’ (Times, 4 April).

Actually, it was the manufacturing sector that McKinley wanted to protect. When he was a congressman for Ohio he drew up the Tariff Act of 1890 that came to be known as the McKinley Tariff. Trump calls him the ‘Tariff King’, a crown he himself clearly wants to wear.

In 1888, with the campaign for tariffs in America in full swing, Engels published an English translation, with his introduction, of a talk on free trade that Marx had given in French in Brussels in 1848. Engels quoted Marx as saying (in chapter 31 of Capital) that historically protectionism had been ‘an artificial means of manufacturing manufacturers’. In his talk Marx criticised free trade too but came out in favour of it because it would hasten the development of capitalism and so bring on the final confrontation between the working class and the capitalist class. As he put it:

‘The free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade’.

Engels’s introduction provided a useful historical survey of protectionism — including which sections of the propertied classes in different countries had benefited from it and which had not at various times — and some background on what led to the McKinley Tariff, but also made some points about the effect of tariffs on different sectors of capitalist business which are still relevant today.

One difference he mentioned was between those sectors which relied on imported materials and those which didn’t. Manufacturers who obtained within the country the materials to transform into what they sold welcomed a tariff on imports of their product as protecting them from outside competition. On the other hand, those manufacturers who relied on imported materials did not want a tariff on them as this would increase the cost of producing their product. Nor did importers want tariffs generally.

This was seen today in the immediate reaction to Trump’s 2 April ‘Liberation Day’ on Wall Street, where share prices reflect traders’ views on the future profit prospects of the quoted firms. Shares in Apple whose smartphones are manufactured in Asia fell by 9 percent and ‘Big multinational consumer groups were heavily in the red, reeling from tariffs on Asian production hubs. Nike slumped 14 per cent’.

Exporters are not keen on tariffs either as their products are likely to be targets of any retaliatory action taken by other countries. America doesn’t export much manufactured stuff (except weapons of war and pharmaceuticals). Apart from oil and gas, its main exports are agricultural products. Sure enough, this is what China’s retaliatory tariffs, announced two days later, were aimed at. ‘The latest measures are likely to have the most impact on US agricultural exports, including soya beans, wheat and corn’ (Financial Times, 4 April).

In short, not all its business sectors benefit when a country imposes tariffs. America today is no exception. Some capitalist businesses are in favour of Trump’s policy but some will be lobbying for exemptions, even campaigning against him. Not that there is any guarantee that his protectionism will succeed in ‘manufacturing manufacturers’ in America, or, rather, in raising them from the dead.

In any event, as Engels noted:

‘The question of Free Trade or Protection moves entirely within the bounds of the present system of capitalist production, and has, therefore, no direct interest for us socialists who want to do away with that system.’

McKinley was elected president in 1896 but was assassinated by an anarchist in 1901.

Editorial: Why tariffs are not an issue (2025)

Editorial from the May 2025 issue of the Socialist Standard

‘Tariff Reform, Free Trade or No Trade? The Fiscal Fraud Exposed’ was the front-page headline of the Socialist Standard in May 1910. It could be today too.

Britain was then a free-trade country with no tariffs on imports. This was the traditional policy of the Liberal Party, then in office, dating from the repeal of the Corn Laws in 1844 which had taxed imports of wheat and other cereals, resulting in higher rents for landowners and so lower profits for capitalists. By the turn of the century, however, British metal manufacturers were feeling the effect of competition from German and American producers and the cry went up for their profits to be ‘protected’. A demand taken up by the Conservative Party as ‘tariff reform’.

Both sides canvassed working-class support for their policy, employing the same specious arguments which we are hearing again today. The Free-Traders’ main argument was ‘cheap food’, that if tariffs were imposed then the price of food would go up and people would be worse off. Today, Trump’s opponents are saying that his tariffs will harm workers by putting up the price of computers, smartphones and clothes. The Tariff Reformers argued that a tax on imports would help preserve jobs in heavy industry and reduce unemployment. Trump, in photo ops with hard-hatted car workers and coal miners standing behind him, is employing the same argument, one that has attractions for the workers concerned and is often supported by their trade unions.

An increase in the cost of living and job security are matters that workers have to worry about. But tariff-free trade does not make workers better off and protective tariffs cannot ensure job security.

Wages reflect the money cost of creating and maintaining a worker’s labour power and tend to go up and down in line with the price of the basket of goods and services they need to do this. If the cost of living increases so, eventually, will money wages (the quicker, the more workers take union action to press for this). And vice versa.

Employers don’t employ workers to provide them with a job but to make a profit out of their work. They are always under competitive pressure to keep costs, including labour costs, down. One way of doing this is to install more up-to-date machinery that enables a worker to produce more in a given period of time. Which results in fewer workers being employed. This process continues even behind tariff walls.

Whether or not there are taxes on imports, workers remain economically dependent on those who monopolise the means of wealth production and have to work for them for a wage that is less than the value of what they produce or provide. Their interest lies in ending this situation by making the means for providing what society needs common property under democratic control.

Then there will be ‘no trade’ because what is trade but the exchange of products between separate owners? With common ownership it cannot exist. What there will be is the simple moving of products from where they are produced to where they are needed, a question of logistics and not a question of buying and selling — or of tariffs and other taxes.

Cooking the Books: Who benefits from tariffs? (2025)

The Cooking The Books column from the March 2025 issue of the Socialist Standard

‘Tariff’, Trump has repeated many times with typical exaggeration, ‘is the most beautiful word in the dictionary’. He seems to see it as a cure-all that will Make American capitalist manufacturing industry Great Again. This may just have been crude vote-catching but this illusion evidently caught the votes of quite a few workers.

A tariff is a tax on imported goods and is usually introduced to protect the profits of domestic producers of the same goods. These will have been complaining of being out-competed by ‘cheap imports’ and ‘unfair competition’ and will have lobbied politicians to do something about this. The tariff is paid by the businesses that import and sell the goods in question (it is not paid by the country from which the goods are imported, as Trump sometimes implies). In the first instance it is the importers who will be impacted. Because they will be making a smaller profit, they will import less and, in accordance with the law of supply and demand, the price of the good on which the tariff has been imposed will go up, whether imported or produced domestically. This will make domestic producers more competitive and so enable them to maintain or restore their profits.

This is obviously something that will appeal to the domestic producers concerned but what about other sections of the capitalist class? If the tariff-hit goods are sold to capitalist firms as materials or components for what they produce and sell, these firms will not be so happy as this will increase their costs. If they are consumer goods sold to workers this will increase the pressure on employers generally to pay higher wages (not to increase living standards, but simply to maintain them). If the consumer good is part of the basket of goods used to compile the consumer prices index, whose increase is regarded as a measure of ‘inflation’, then inflation in this sense will go up.

In terms of employment, the workers in the protected industry will keep their jobs for a little longer before automation catches up with them. On the other hand, some workers in other industries will lose theirs.

The overall effect of imposing a tariff will be to raise some prices and not just of the goods on which the tariff is levied. The main beneficiaries will be the domestic producers of the goods in question. Their profits will be ‘protected’.

However, there are other considerations. To be effective in protecting the profits of a particular sector, a tariff needs to be imposed not just on the good coming from one country but on it coming from any country; otherwise the importers of the good could still import it. Which will be why Trump has talked of imposing a tariff on some goods (steel and aluminium) wherever they come from. Another complication is that the country singled out will likely impose counter-tariffs which would harm sectors producing for export. The EU and China will be tougher nuts to crack than Canada or Mexico.

Although Trump gave the impression on the campaign trail that American manufacturing industry will expand and thrive behind protective tariff walls, his first use of tariffs has been as a bargaining tactic. To impose them and then open negotiations with the other capitalist state about what it needs to do to get them removed.

Tariff protection has unintended side-effects and, in any event, does not benefit all sections of capitalist business in the country imposing the tariffs. The working class of the country as a whole is not affected much either way, if only because their wages are tied to the cost of living and tend to go up or down as it does. It is not a working-class issue.

Cooking the Books: Trumponomics (2024)

The Cooking the Books column from the September 2024 issue of the Socialist Standard

‘On the campaign trail, Trump has floated a ten-per-cent tariff on all imported goods, and a sixty-per-cent levy on those from China’ (New Yorker, 15 July). He also wants to devalue the dollar vis-à-vis other currencies. In an interview with Bloomberg Business he ‘called the strong dollar “a big currency problem” and “a tremendous burden on our companies”’ (Times, 29 July). Tariffs and dollar devaluation, that seems to be what his plan to Make American Capitalism Great Again amounts to.

The capitalist class in any country is not a monolithic bloc when it comes to commercial matters. There are differences between those whose business is exports, those who face competition from imports, those who import raw materials and parts, those who neither export nor require imported materials. What Trump has in mind would affect these groups differently.

A 10 percent tariff on all imports would benefit some US manufacturing companies by protecting them from outside competition. But this would mean an increase (not necessarily proportionate but what the market will bear) in the price of their products. Insofar as these are consumed by workers this would exert an upward pressure on wages, which would affect all capitalist employers even those involved in neither exports nor imports. It would also risk, in fact provoke, retaliation by the other country or trading bloc, which would affect exporters, who in the US mainly produce food for humans and animals.

When in 2018 his administration put a 25 percent tariff on imported steel and 10 percent on aluminium, the EU retaliated with tariffs amounting to nearly $3 billion on US imports. China reacted too. As the New Yorker noted, ‘when Trump imposed tariffs on some Chinese goods in 2018, Beijing retaliated with levies on American imports which hurt American farmers and manufacturers’, adding:

‘If a new Trump Administration introduced universal tariffs, many other countries would face enormous domestic pressure to respond with similar measures. In the worst-case scenario, Trump’s policies could lead to an all-out trade war’.

A world-wide trade war in fact, since Japan, India, Brazil and others would join in as well as China and the EU.

A fall in the value of the dollar compared to other currencies would make US exports cheaper and so be welcomed by exporters. But it would also make imports more expensive and so be unpopular with companies that rely on them, whether to sell or to use to produce something else. Because the dollar is the world’s reserve currency, held by states and companies to settle their international transactions not only with the US but also with each other, a fall in its value would have worldwide repercussions.

It would reduce the value of the reserves held by other states and companies. These are mainly held in the form of US Treasury bills and bonds; in other words, is money lent to the US government and which allows the US to run a trade deficit but also to finance its huge military budget. Making the dollar weaker might benefit US exporters but could make borrowing from abroad more difficult. Some US capitalists disagree with Trump’s approach and the matter (in which workers have no interest) will be settled at the ballot box in November.

Trump may act the boor (and be one) but he is essentially a businessman and wants to use the same sort of tactics — involving bluffs and deals — against US capitalism’s economic rivals that competing capitalist companies apply against each other. States do this anyway but generally more diplomatically. A Trump administration would make it clear for everyone to see that economic rivalry between states is about supporting their companies in the competitive struggle for profits.

A Middle-Class Utopia. (1907)

Book Review from the July 1907 issue of the Socialist Standard

Modern Thraldom.—A New Social Gospel, by Dr. W. Hampson, M.A. London: Wells Gardner, Barton & Co. Paper covers, 162 pp., 1s. 6d. Net.

The early portion of this book describes the servitude into which “borrowed” tools, houses, and land are supposed to have thrown the “labouring classes,” the “clean clothes classes,” and also the tradesmen, small manufacturers, and farmers. The evidence in the book, however, really shows that the poverty of the workers and the crushing of the small capitalists are due to the concentration of wealth and industry into fewer hands turning increasing numbers into propertyless hirelings of the possessing few. But to put it thus involves Socialism as the solution, so our author prefers to attribute the situation not to the inevitable march of industrial development, but simply to credit in some form or other. 

The most interesting part of the book is that dealing with agriculture, where many reasons are given for the decrease in number and increase in size of farms, but where the most important reasons such as the development of agricultural machinery which cannot profitably be employed on small farms, the general economies of operations on a large scale, and the development of the machinery of transport which brings other climes into more acute competition, are missed. This, however, is of a piece with the fact that Dr. Hampson nowhere realises the force of the economic trend.

From his point of view of the small property-holder, the author is much troubled by the question of the rates, but his own evidence shows it to be a question that does not concern the workers or even the tenant farmer. He says, p. 46: —

“At the time of the great depression in land values and profits from land, it became impossible for farmers to continue paying their former rents, and a percentage was remitted in most cases, so as to bring the amount payable each half-yearly rent day just within the limits of the possible. If a season were exceptionally bad, so as to involve the farmers in inevitable loss, a larger percentage of rent would be remitted. If times improved in some way, the remission would be less. Thus when the Agricultural Rating Act was passed, to relieve the farmers of a portion of their rates, a smaller percentage of rent was remitted the next half year.”

The middle class of course has its schisms and the author tilts against modern radicalism and against that municipal enterprise which is such a blessing to many middle-class investors, and also against the officialism that provides easy positions for their sons ; but Dr. Hampson’s attitude is nevertheless essentially that of the class between the devil and the deep blue sea. He protests against rings and combines, but is specially vehement against working-class trade organisations, and states that trade union action, by restricting free competition in labour “means a reduction of wages and in the standard of living,” while on p. 28 it is further urged that:—

“All combining, negotiating, organised advising and warning, striking, picketing, and other proceedings intended to restrict the freedom of the labour market, ought to be regarded and treated as criminal, so as to restore complete freedom to the man who wants to sell labour and to the man who wants to buy it.”

There is also on p. 12 a curious defence of the exploitation of labourers—exploitation by the middle class of course. It is stated that the shareholders having the necessary plant and materials or equivalent wealth—

“Lent them to the officials and working men and women of the factory, on condition that the latter, having borrowed them and worked with them, should pay to the lenders a part of the profits earned by their labour, namely, all that was over after they had been paid a subsistence wage depending, among other conditions, on the recognised minimum standard of living in the district at the time. Now this was a perfectly open bargain, well understood by all the parties to it, and the shareholders, who in fact lent the factory and appliances, have a right to claim that they shall not have hard words thrown at them, as capitalists, because they are taking a part of the profit earned by other men’s labour.”

In the description of the Utopia that is expected to follow the adoption of the author’s suggestions there is nothing but glorified middle-class conditions, with the middle class predominant in wealth and power. It is prohibited to live in hired rooms and houses, and all credit is forbidden except the capital of limited liability companies, of which all shareholders are required to be also occupied in connection with their company, while no shareholder may own more than five times the smallest allotment of shares. A kind of Single Tax is instituted (in spite of the author’s ideal of free internal trade) in the nature of a poundage on every cash transaction. This tax (which the author says is not a tax, and which is to be levied without officials) is to enable the one man government to supply such of the citizens as have deposited £250 in the State Bank, with a further £250 on their marriage for the purpose of buying house, furniture and allotment. There are to be no boards, committees, councils or parliament. National government is to be run by an elected president and local administration by a manager ; while no one can vote unless he owns, among other things, a bicycle !

There is still to be wage-slavery in the new Utopia, but the workmen are supposed to be able to get higher wages through the absence of trade organisations, and through being forbidden to hire rooms, so having to buy a room or rooms outright. The labourer is to give six hours industrial labour per day and put in the rest of his time on the land. The thrashing, winnowing and grinding of corn is to be done at home in small hand machines because :

“However little it may cost to grind in a steam driven mill, it costs less to do it at home in the time that used to be spent in the evening at a public house. It costs nothing at all, but actually saves the money that was once spent in drinking to while away the time.”

How typically middle class ! 

Even the great domestic servant question is almost solved in this Utopia. The author says :

“And are mistresses no longer the slaves of their servants ?

In this respect also there is great improvement. We have now no large class of excessively rich, keeping large houses full of ‘pampered menials,’ and so setting before other servants a false standard of lavishness, luxury, ease, pilfering, and ‘perks.’ On the other hand the middle-class ladies, having given up imitating the luxury of the rich, have themselves become as good practical housekeepers as their husbands are practical business men and cultivators. They can, if need he, manage their houses in many cases without outside help, and so, when they have that help they know how to keep, without petty domineering, the position of mistress in their own homes.”

The Doctor’s Utopia illustrates both how completely class interests as they are recognised mould a man’s views, and how narrow is the mental vision of the middle class.

For the realisation of this Utopia an association called the Land and Labour League is to be formed and to be endowed by a few charitably disposed millionaires for the purchase of property, the tenure of which is to be sold to League members who in turn are not allowed to give any of their property as security for a loan. Leaguers will pay “no rates or taxes,” these will be paid by the League out of proceeds of a receipt stamp tax to be levied on all members.

The League, says the author, is to be a co-worker with the garden city schemes at Bourneville, Port Sunlight, York, Letchworth and other places, so it is very small beer after all.

The League will, when funds allow, put £250 to the selected member’s on his marriage for the purchase of house and grounds that are to remain technically the property of the League—a sort of glorified building society in fact that is supposed to grow snowball like, until it absorbs the whole of Society.

But what of the, working man ? How is he to save the necessary £250 in order to participate in this paradise ? The author has told us that to-day “The lowest salary which will supply the bare living must be accepted by each applicant lest another cut in and take the place,” also that “conditions make it practically impossible for an average man to rise out of the labouring ranks in which he was born.”

The odds therefore appear to be rather long against the workers being able to save the requisite £250 each, indeed, they do not stand even an outside chance. But the author of the “New Social Gospel” has a most simple plan. It is to tax immigrants heavily and put an almost prohibitive tax on imports. Then, says the doctor:

“When all the production for the English market is secured for the English producer, there will be for a time an era of prosperity seldom equalled before. Demand will overtake supply for a time. The price of labour will rise higher than ever before; the unemployed and, under such tempting conditions, many even of those who are now unemployable, will be earning money ; and the workers being rich, the prices of common articles will rise also, though not in the same proportion as wages.”

Truly a simple plan—for simpletons. The workman knows that labour-power is the last to participate in a rise in prices, so that the problematic rise in wages will not be proportionate to the rise in general prices. The worker will also see that if prices rise, then the price of house and land rises also, thus the amount to be saved rises proportionately, leaving the possibility to the workman of saving at least as remote as before.

Further, restricted immigration is no new thing, and where instituted has made no appreciable difference to the workers. It is not the alien, but capitalist development that creates the unemployed, and the same process is going on in every country ; new inventions and processes, greater concentration and more efficient organisation decrease daily the proportion of wage workers required by the masters to produce for the market. Large numbers of workers are thus thrown on the streets while the owners of the instruments and materials of labour reap the whole of the benefit.

And with regard to a prohibitive import tax, owing to the very nature of international exchange, the import trade of the country cannot be destroyed without causing havoc in the export trade and the consequent ruin (under capitalist conditions) of those producing for export. We have also object lessons the whole world over of the futility of fiscal juggling as far as the workers are concerned. Capitalist conditions breed working-class poverty everywhere, and must do so long as the workers are the hirelings of the possessing few. But even supposing that by some miracle all wage slaves managed to save £250 and so live rent free ; is it not a fact that capitalism (whether under small or large manufacturers) turns the very thrift and temperance of the workers into weapons of offence against them ? and does not Dr. Hampson himself prove this ? Speaking of allotments he says :

“Suppose the profits from a plot of land to be equal to two shillings a week. Then a man and his family can live in the same moderate degree of comfort as before on a wage of fourteen shillings instead of sixteen if need be.

It is the professed object of the promoters of improvement on these lines that the improvement shall become general. Suppose them to succeed to the full extent of their hopes. Suppose that practically all the labourers increase their wages by such means to the equivalent of eighteen shillings, so that they could, in case of necessity, continue their present style of living on an actual money wage of fourteen shillings. The farmers would not be long in making the discovery that their labourers were able to live on two shillings a week less. And the next week they would require their men to prove their ability.”

Such, indeed, is the mainspring of the welcome that has greeted the present Liberal Small Holdings Bill. And its undeniable truth destroys at one blow Dr. Hampson’s Utopia as far as the workers are concerned. Whatever cheapens the cost of living of the workman, as soon as it becomes general, reduces his wage, competition compelling him to sell himself for a mere subsistence. Yet Dr. Hampson dares to say that if the worker did not have to pay rent he would be enabled to exact a higher wage ! The small capitalist is essentially reactionary, and his only possible ideal is one that runs counter to every economic tendency. And our author, voicing the interests and ideals of this class, has reckoned without his host, the financial magnate, who now rules the capitalist roost, and without, also, the army of the workers, who can only go forward, to industrial democracy,—not backward, to the infancy of capitalist society. Unlike the middle class intellectuals, the scientific Socialist, has outgrown the Utopian stage. Our author, however, evidently imagines that men figure the society they want and then make it to order ; so he thinks that if the public find his Utopia good they will set themselves to make one like it. The scientific Socialist does not erect a fanciful Utopia, but analyses actual Society, its economics and its history, and tracing its laws of development sees whither the basic factor, the development of wealth production, tends, and derives therefrom, not a detailed picture of the future, but the broad direction of economic evolution and the essential principles of the society foreshadowed by the present. And by the study of men’s actions, motives and history, he is enabled to discover the essential principles of the action that must be taken to render the transition speedy and beneficial.

Dr. Hampson has not done this, therefore his reforms are upon all counts a snare and delusion to the middle class in their struggle against the inevitable, while to the working class they offer at best nothing but a shuffling of masters by no means to the better.

F. C. Watts

Summit's up (2005)

From the December 2005 issue of the Socialist Standard

At first there was NAFTA, then there was FTAA – or rather, there wasn’t, because talks to establish the Free Trade Area of the Americas have got bogged down in disagreements. The North American Free Trade Agreement, between the US, Canada and Mexico, came into force in 1994. Its declared aims were to eliminate trade barriers between the three countries involved and increase investment opportunities. In fact, it is far more about investment than trade, allowing US and Canadian factories to be moved to cheap-labour areas in Mexico and opening up further chances for privatisation. But it was always seen as a first step only, and the FTAA, which would extend to most of Central and South America and cover 34 countries, is the logical conclusion, originally intended to come into effect at the start of 2005.

The FTAA has many opponents. The nasty right-wing super-nationalists in the John Birch Society (see www.stoptheftaa.org) view it as part of the ongoing abolition of the United States, opening up borders to all sorts of criminals, terrorists and other undesirables, doing away with US sovereignty and creating a European Union-style integrated political unit. This isolationist conception does not fit in with that of the rulers of the US, however. There have also been opponents from the ‘left’, largely from the anti- globalisation or global justice movements (www.globalexchange.org/campaigns/ftaa/, for instance). They point to the effects of NAFTA in cutting wages in Mexico and increasing threats to the environment and public health. FTAA, they claim, will just be the same thing, writ larger. 

In early November the Summit of the Americas was held in Argentina, partly to see how FTAA could be put back on track after the rulers of  some countries objected to it. In the meantime, smaller groupings have been pushed forward, such as the Central America Free Trade Agreement (due to start in January 2006) and the Andean Free Trade Agreement (which is still under negotiation). The US is also particularly interested in expansion of the Panama Canal, which carries 14% of US foreign trade, so that it can handle more and bigger ships. But the Summit did not give the green light to FTAA, despite Bush’s threats and arm-twisting. A handful of countries stood out against it, including Venezuela, where oil resources give the rulers a bit of bargaining freedom (see the November Socialist Standard). So now things are being left to the meeting of the World Trade Organization in Hong Kong in the middle of this month.

The Argentinian Summit was marked by protests and police crackdowns, together with the usual populist anti-American pronouncements from Presidents Chavez of Venezuela and Lula of Brazil. Clearly, many workers are unconvinced that a policy is in their interests just because it suits Bush, his fat-cat backers and the American capitalist class in general. But nobody raised the real issues about the way society is run.

The truth is that arguments about ‘free trade’ or ‘fair trade’ or any other kind of trade completely miss the point. All variants on trade accept the idea that food, clothing, housing etc. should be bought and sold rather than freely available. They also accept that the earth should belong to a small class of owners rather than being the common property of all its people. They all accept the existence of capitalism rather than rejecting it entirely as Socialists do.

Voice From The Back: The benefits of globalisation (2001)

The Voice From The Back Column from the December 2001 issue of the Socialist Standard

The benefits of globalisation

“America’s steel industry is in a mess; only a week ago, a veteran foundry, Bethlehem Steel followed two dozen of its brethren into Chapter 11 bankruptcy . . . The company blamed its plight on a tide of cheap imports and this week Pittsburgh-based US Steel announced third-quarter losses of $23 million. …. President Bush in June announced he would take action under section 201 of the Trade Act of 1974, an obscure law that permits global safeguards to industry. Unlike anti-dumping measures which require proof of unfairness, section 201 permits the erection of tariff barriers to provide temporary relief from import competition.” (Times, 24 October)

So, behind all it’s bombast about free trade and the benefits of competition, the US government reveals yet again a truism about capitalism. Capitalists are in favour of free trade when they are winning but against it when their competitors are winning.

It’s a dog’s life

Something of the madness of capitalism in general and post-disaster New York in particular can be gauged from Chris Ayres’s Wall Street Diary in the Times (25 October).

“A bomb-sniffing dog can take as much as $2,500 (£1,760) back to his kennel for a 16 hour shift. With the dogs working seven days a week, this adds up to an impressive $912,500 per year.”

A great deal more money than the wages of the heroic New York firemen who perished in that recent disaster, or indeed, for that matter, any of our readers.

It ain’t half hot, mum

In this column in May we reported that British police forces were interested in the development of an American crowd control vehicle that zapped demonstrators with microwaves. The good news for control freaks everywhere is that the Air Force Research Laboratory (AFRL) in New Mexico have recently completed tests.

“The Air Force now wants to use this Active Denial Technology (ADT), which it says is non-lethal, for peacekeeping or riot control at “relatively low range” – possibly from low-flying aircraft. … AFRL says that the 3 millimetre wavelength radiation penetrates only 0.3 millimetres into the skin, rapidly heating the surface above the 45 degrees C pain threshold. At 50 degrees C, they say the pain reflex makes people pull away automatically in less than a second – it’s said to feel like fleetingly touching a hot light bulb. Someone would have to stay in the beam for 250 seconds before it burnt the skin, the lab says, giving ‘ample margin between intolerable pain and causing a burn'” (New Scientist, 29 October).

Wow, is this tempting, or what, for repressive regimes everywhere? Burn, baby, burn.

Gerry in Wonderland

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean – neither more nor less.” A similar disdain for language would seem to be shared by Lewis Carroll’s character in Alice in Wonderland and Gerry Adams.

“Mr Adams said, ‘The IRA is not a terrorist organisation. The name terrorist is bandied about willy-nilly. Clearly what happened in the USA recently was a terrorist act where civilians were deliberately targeted. In any war terrible things were done. In my view the IRA has never deliberately targeted civilians'”.

Pressed on whether the IRA had never placed bombs in shopping districts he said, “Well, it depends, it depends, you see.” He then added: “It’s quite academic.” The Herald (6 November)

Not really all that academic though if your kid has been blown up by some mad zealot, is it, Gerry?

A strange democracy

In an apparently surprising turnaround Michael Bloomberg was elected Mayor of New York last month. Surprising in that he was standing as a Republican in a city where five out of six voters are registered Democrats. Surprising also in that until about a year ago he was a Democrat. He has had no previous political experience Blatantly he only became a Republican to stand for mayor and used the campaign slogan “A leader not a politician.”

His 51 percent share of the vote becomes less surprising however, when you realise that Mr Bloomberg is a billiomaire and spent a staggering $60 million on his campaign. In other words he bought the office of Mayor of New York. A strange “democracy” indeed.

Praising Karl Marx

Socialists are used to the works of Karl Marx being dismissed or ignored by capitalism’s academics, so it is a pleasant change to read on page 166 of Steve Jones’s Almost Like A Whale a brief compliment to Marx:

“Karl Marx got it (as usual) more or less right: ‘what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality’. His statement brings out the pragmatic nature of evolution, in a hive or anywhere else. Bee society has no plans.”

From rats to riches

A short news item from  Rio de Janeiro speaks volumes about the ingenuity of the working class and the madness of capitalism. “Rats in the Brazilian city outnumber human beings ten to one and people are being offered about £1.30 for every 2lb of dead rat found. Officials are using poison and will collect carcasses – despite fears that poor people will begin rearing the rodents.” (Times, 10 November).

Editorial: Sound and Fury. The Election and the Workers. (1931)

Editorial from the November 1931 issue of the Socialist Standard

The general election has come and gone, and nothing fundamental has been changed. The workers were asked to give a mandate for the continuance of the social system that enslaves them, and in their blindness they have done so.

The National Government supporters just prior to the election numbered 327. They return to office with about 560 supporters, of whom 170 are Conservatives; 70 are Liberals; and 13 are members of the MacDonald Labour Group. The opposition consists of 52 Labour and I.L.P. M.P.s and four Lloyd George Liberals. The total is made up by a few Independents and Irish Nationalists. The Labour Party is now reduced in size approximately to the number elected in 1918.

At the last election, in 1929, the Conservatives polled 8,656,173 votes and won 260 seats. This time they have polled 12,000,000 votes. The Labour vote in 1929 was 8,389,512, and they won 289 seats, many of them on minority votes. The Liberals, in 1929 won only 58 seats, although their vote was 5,308,510. This time the Labour vote has fallen to about 6,650,000, while their seats have dropped far more. They are now less numerous than the Liberals, although the Liberal vote on this occasion is less than 2,500,000. The MacDonald Labour M.P.s polled only 338,000. In the 1929 Parliament there were over 200 Labour M.P.s who, although elected as Labour candidates, were also members of the I.L.P. There were no Communists in the last Parliament, nor are there any in the new one. The Mosley candidates all failed.

Since 1929 the electorate has grown from 28,850,000 to 30,159,000. The number of electors who did not vote for any candidate increased considerably. So much for the figures.

What were they fighting for?

Many observers, both at home and abroad, some of whom ought to have known better, accepted the rash claim, made for electioneering purposes, that the election was a clear-cut struggle between Capitalism and Socialism. This is a grotesque misreading of the situation. On the one side the Government parties under MacDonald were asking for “a free hand, nothing ruled out,” although most of their candidates construed “nothing ruled out” as meaning “tariffs ruled in” ; in spite of the fact that by far their most formidable standard bearer in the fight was Mr. Snowden, who is a staunch free-trader.

On the other side were the Labour Party and the group of free-trade Liberals under Mr. Lloyd George. The Labour programme gave prominence to free-trade, to the restoration of the cuts in wages and unemployment pay, and to the nationalisation of the banks. Mr. Lloyd George told his followers that the last of the three chief Labour aims need not be taken seriously, and that Liberals ought to vote for the free-trade Labour candidates. Mr. Snowden, until recently an advocate of bank nationalisation, now opposed it. He also pointed out that the Labour leaders’ enthusiasm for free trade was as suspect as their repudiation of the cuts they had approved when in office. In a letter to the Press (see “Daily Telegraph,” 22nd October) he made the following illuminating and unanswered statement about his late colleagues in the Labour Government :

“Mr. Graham put the case for the tariff. He told us a tax of 10 per cent. on imported manufactured and semi-manufactured goods would raise £25,000,000 a year, and a tax on all imports £60,000,000 a year.

We took two votes. The first was whether we should adopt the proposal of a 10 per cent. tax on manufactured and semi-manufactured imports. Fifteen members, including Mr. Graham, voted for that, and five against. Then the question of a duty on all imports was put, including food and raw materials. Mr. Graham and four others voted for that, and fifteen against.

It was only after these votes, when it was seen that we could not get unanimity, that the proposal was dropped, because, as Mr. Henderson put it, if it had been persisted with it would have broken up the Cabinet.”

This discussion in the Labour Cabinet took place towards the end of August, and was reported in the “Daily Herald” at the time. On August 20th the Herald had a bold headline across the front page—”Tariffs in the balance.” The report goes on to say that in the Cabinet :

“There was a tense debate on the proposal for a revenue tariff on imports.”

The day before the “Herald” had said :

“the proposal for a revenue tariff will receive support from ministers who have hitherto been rigid free-traders.”

On August 22nd the “Herald” brought the Trades Union Congress into the picture :

“There is keen division in the T.U.C. on the subject of a tariff for revenue purposes, but the majority would be in favour of such a proposal as an alternative to any cuts in unemployment benefit.”

But, it may be asked, if the Labour Party leaders were prepared, even reluctantly, to support the economies and a revenue tariff, why did they oppose the National Government, most of whose members also wanted those things? The answer is, of course, that the party leaders on both sides were doling what they and their predecessors have always done; they were fighting for office. Faced with the National Coalition, the Labour Party grabbed for the Liberal free-trade vote. Mr. Henderson (a few days later than Mr. MacDonald) journeyed to see the Liberal leader, Mr. Lloyd George, on his sick bed. They had a “cordial” but secret talk. The local Labour Parties withdrew their candidates who were opposing Lloyd George and his son and daughter. He, in his broadcast, and in an interview given to the “Daily Herald,” and the “Manchester Guardian,” and other Liberal papers in their editorials, gave a plain lead to the Liberal voters to vote Labour. During the week before polling day the “Herald” printed column after column of reports of Liberal speakers, Liberal money, and Liberal Party machinery being placed at the disposal of the Labour candidates. All the past bitter condemnation of Lloyd George and his party was forgotten in the twinkling of an eye when the chance of office and the security of seats were at stake. Forgotten was the admission, so frequent in recent years from Labour leaders, that the issue of free-trade versus protection was of no importance to the workers. No longer was Lloyd George the “coiner of purple phrases and breaker of promises,” as the Herald had so happily described him in their special “Lloyd George Number” of December 1st, 1923. No longer was he to be shunned as the man who always wreaks “incredible destruction,” the “shoddy salesman” of politics, the “two-faced” politician who “tricked the miners with Sankey Commissions, Duckham Reports, and so on, until the coal-owners had all ready for their bitter attack on the Federation.” Then “A vote for Lloyd George is a vote for the enemies of the workers and the foes of democracy”; now Lloyd George Liberals and Labourites were all together, fighting the battle of “progress” !

These are the depths to which the reformers have dragged the name Socialism. On the one side MacDonald with his, “I am still a Socialist,” leading the Tory army in their fight for tariffs, and on the other side Henderson and Labour Party, attaching the word socialism to their programme of reforms behind which Lloyd George could muster his free-trade capitalist “enemies of the workers.”

The utter shamelessness of the Labour leaders can be seen from their plea that they were fighting to defend the workers against the high prices which would follow tariffs. In all the years up to 1929 they had proclaimed themselves the party of low prices. Suddenly, when they came into office in that year they discovered that prices were falling heavily, the thing they had promised to bring about. Promptly they swallowed their low-price theory, and told their disappointed followers that falling prices were the cause of all the trouble. The “Daily Herald,” now so strong for cheapness, then carried on for months a campaign for inflation and higher prices. The following is from the “Herald” editorial on July 14th, 1931 :—

“It is urgent—imperatively urgent—that without delay the necessary steps be taken so to regulate currency and credit as first to raise and then stabilise prices…..Inflation—and it is folly to be frightened by a word—is the only possible remedy.”

Three months later, when it was “imperatively urgent” to catch the Liberal free-trade vote, they were back on their old platform of low prices.

The I.L.P. and the Communists.

In this election, for the first time, the I.L.P. ran its own candidates without the endorsement of the Labour Party, the endorsement being withheld because the I.L.P. would not undertake always to vote with the Labour Party. In two of the nineteen constituencies which the I.L.P. fought (Peckham and Shettleston) there was also an official Labour Party candidate, while in Stockport (a double member constituency) where the Labour man has hitherto run in double harness with a Liberal, the Labour Party refused to back the I.L.P. interloper who threatened to spoil the arrangement with the Liberals.

The result is interesting. In 1929 the total Labour vote in these nineteen constituencies was 332,413, and they won thirteen seats. This time the I.L.P. polled 260,344 and gained only three seats. They held Shettleston against the official Labour man, and in Peckham their candidate received many times the vote of his official Labour opponent. In Peckham, the official Labour man and the MacDonald Labour man both forfeited their deposits.

The I.L.P. parliamentary group is now, therefore, reduced to three members, and their chairman is outside the House.

Just before the election, their chairman, Mr. Fenner Brockway, writing in the “New Leader” (2nd October), confessed the uselessness of reforms which have been the I.L.P.’s sole stock-in-trade for nearly forty years :

“The system of capitalism is failing so obviously that the policy of reforms within capitalism must be rejected. We must concentrate on winning power of such nature that we can proceed boldly with the transition to socialism all along the line.”

In spite of which the I.L.P. candidates fought as usual on a programme of reforms. Three years ago Mr. Maxton described the Labour Party programme, “Labour and the Nation,” as a programme of capitalism. The 1931 programme, was, he said, “even more reactionary” (“Evening Standard,” 1st October). Yet the I.L.P. allowed a large number of its members to fight as official Labour Party candidates, and endorsed Mr. J. Beckett, as I.L.P. candidate at Peckham after he had declared his “whole-hearted support” of the Labour election programme (South London Press, 9th October). The I.L.P., although much reduced in size, has not altered in its quality. It is still the same body of vote-catching reformists, maintaining a precarious existence on the backs of the trade unions and the Labour Party.

The Communists ran 25 candidates, the same number as in 1920. In 1929 they obtained their aggregate vote of 50,617. This time, on a somewhat larger electorate, their aggregate vote was 70,844. In the ten constituencies which they fought on both occasions their vote was, in 1929, 39,283, and in 1931 48,612. They did best where they were fighting only one candidate, a Labour Party candidate.

They, too, fought on a reform programme of about twenty “demands” (“Daily Worker,” 14th October). In practise their policy is always determined by the actions of the other reformist parties. They run yapping at the heels of the Labour Party, and where the Labour Party goes they go, too. As the Labour Party, at the eleventh hour decided to be a free-trade party, the Communists had to follow suit. So one of their “demands” was “No taxes or tariffs which raise the price of food and clothing for the workers.” On Sunday, October 11th, a Communist Party demonstration in Hyde Park marched behind a banner with the “revolutionary” slogan, “No Taxes on the People’s Food.”

In this general election for the first time the official communist advice to the voters did not, so far as our knowledge goes, include a recommendation to vote for all or even some of the Labour Party candidates.

The Future.

The election changes nothing except the persons who shall occupy office, and some questions of capitalist trade and finance, of interest to sections of the capitalists in their mutual antagonisms. Capitalism is now sunk in one of its periodic crises of overproduction. In due course it will stagger back to “normal,” before falling again into yet other crises. This process will continue until the workers understand socialism and organise in the Socialist Party to achieve it. The votes for the Tory-Labour-Liberal Party under MacDonald, and for the Labour-Liberal Party under Henderson and Lloyd George, are votes for capitalism and reforms of one kind and another. They are not votes for socialism. This is proved by the alternating fortunes of the parties at succeeding elections. We are not prophets, but one thing seems certain—that the Labour Party will never obtain, and do not really want, an independent majority. They may, perhaps, again reach office, but only with Liberal support in the House and in the constituencies. The Leaders understand this, hence the efforts they made at the Labour Party Conference in October to secure the rejectIon of a resolution which, if it had been passed, would have committed them never to accept office as a minority. What we have long pointed out is now becoming clear for all to see. It is impossible to unite the workers on reform programmes. Each reform antagonises as many workers as it attracts. Reform programmes, as we can see before our eyes, split the workers into half a dozen warring sections. Another illusion has also been dispelled. We were told that after voting Labour workers would then vote for Socialism ; instead of which, as we foretold, they have returned to Conservatism. Only the simple demand for socialism will eventually hold the workers.

Those who have patiently waited, bearing all disappointments, but trusting in the Labour Party until such time as it had an independent majority will do well to ponder the prospect of a “Labour” Party tied permanently to Liberal votes, and limited to a programme approved by Mr. Lloyd George and his capitalist free-trade backers.

The Passing Show: Bare-faced Cheek (1960)

The Passing Show Column from the October 1960 issue of the Socialist Standard

Bare-faced Cheek

No one could accuse the world's ruling classes of consistency. The ruling class of each country is devoted to one thing, and to one thing only—the preservation of its power. Our rulers love to proclaim their attachment to high-sounding and immutable principles—but if their interests demand it, they will change their tune overnight. Recently there have been enough somersaults performed by prominent politicians to make an acrobat green with envy.

Here are some instances which occurred recently within a space of two days.

Principles v, Royalties

The ruling class of Morocco gained its independence from France some years ago. In its struggle it reiterated the right of every people to independence, the iniquity of one country holding another in subjection, and so on. More recently another former French colony in northwest Africa, Mauritania, became self-governing within the French Community. It has now decided to declare itself independent in November. One would think that the Moroccan ruling class would welcome this new step by the ruling class of Mauritania—the Mauritanians are only doing what the Moroccans have already done, and are acting on the very principles upheld by Morocco during its struggle with France. But not a bit of it! The Moroccan Government is breathing fire at the news. It has banned a Moroccan newspaper which supported Mauritanian independence, and has threatened to go to the United Nations. For the Moroccan rulers claim that Mauritania is really part of Greater Morocco. The Moroccan Government, which denounced France for wanting to hold on to its empire, is now planning an empire of its own. This despite the fact that Morocco and Mauritania have not even got a common frontier: Morocco would have to take over part of Algeria to give it access to its new province.

Why are the Moroccan rulers so eager to get their hands on Mauritania, even though they have to eat so many of their own words in the process? It's simple. Large and very rich iron ore deposits have been found in Mauritania, and the mining of them is about to begin by the Miferma company. The royalties payable on the ore are a prize worth trying for. And what does the Moroccan ruling class care about principles, when they see a chance of rich profits from the Mauritanian iron ore?

Terrorism

Another recently independent Mediterranean state has also given an example of inconsistency. Cyprus is now self-governing: the Cypriot ruling class has taken over, having ousted the British. The Cypriot leader in this struggle was Makarios. now President of the Cyprus Republic. The struggle was carried on by terrorism, which is the name now given by a ruling class to any kind of armed internal opposition to its rule. This terrorism, which forced the British to relinquish the island, was led personally by Grivas, Makarios's close ally in the struggle. But Makarios, having won his battle through terrorism, has now turned against it. He recently appealed for all guns and ammunition to be handed in to the authorities, and said: "I am not prepared to tolerate any kind of terrorism.” Terrorism having made him President of Cyprus, Makarios no doubt now sees that he had better deny any opponents of his the use of the same weapon.

Free competition

The American Government is worried about the high tariff wall with which the six European "Common Market” countries propose to surround themselves. The U.S. delegate to the General Agreement on Tariffs and Trade conference said recently (The Guardian, 2/9/60):

Whatever serves unduly to insulate the community market from the competition of world prices is out of harmony with our common GATT objective for the expansion of international trade.  . . .  The system will work to the serious detriment of the US and other third country suppliers — in fact, to the community itself. 

When it is to their advantage, the United States government supports “the competition of world prices.” But at home, it has a different policy. When big new projects are opened to tender, any foreign firm competing is handicapped from the start. Several British firms have recently found that although their tenders were the lowest for American projects, it was an American firm that got the contract. Which all goes to show that any capitalist country’s government must look after its own capitalists first. And in the process, as in this case, it must often speak with two voices—one for home and one for foreign consumption.

Mandates

Mr. Louw, the South African Foreign Minister, is concerned about the threat by stevedores and dockers in Tanganyika to boycott all South African goods. He protested to the British High Commissioner in South Africa that Britain, as the mandatory power, had obligations to ensure “freedom of transit and navigation and complete economic and commercial and industrial equality.”

For the South African government to quote the League of Nations mandate in support of its protest must have called for nerve of the highest order. For South Africa itself was given a mandate by the League of Nations — the mandate over what had been German South-West Africa. After the second world war it incorporated South-West Africa into its own territory. To all protests it replied that the League of Nations had ceased to exist, and that its mandates had ceased to exist with it. Therefore it no longer had any obligations to help the inhabitants of South-West Africa to self-government, and indeed was entitled to grab the whole country for itself. The question of South-West Africa has been raised over and over again in the United Nations, and on each occasion the South African government has denied absolutely that a League of Nations’ mandate could any longer have any validity. And now the South African government itself has appealed to a League of Nations’ mandate in support of its protest over Tanganyika!

It seems that to be a minister or a government spokesman in the modern world, the prime necessity is bare-faced cheek.

Alwyn Edgar