Letter: "Mother-right" (1980)

Letter to the Editors from the October 1980 issue of the Socialist Standard

"Mother-right"

Dear Editors,

The article “Battered Wives” in the July Socialist Standard follows Engels’ view in “The Origins of the Family” that mother-right was the general position before male-dominated, property, class institutions became established. Agreed: the position of women relative to men drastically deteriorated with the advent of private property, but it is open to question whether primitive societies were essentially matrilinear. Some were, others were definitely not. Why? is the subject of much controversy in anthropology. While the 19th century founding fathers of anthropology had precise, straightforward answers on how primitive humanity’s life was structured and functioned, present day anthropologists seem less certain of the meaning of the mass of data that has accumulated. I will quote just one of them—Leslie A. White a cultural evolutionist in the grand, system-building tradition of L. H. Morgan. His is by no means the last word, but at least he puts order into the question, and writes clearly.

As a general proposition we may say that prominence or predominance of men in the mode of life of the (primitive) society will tend to produce patrilinear lineages; prominence or predominance of women will tend to form matrilinear lineages. Thus a culture in which warfare, hunting or herding is an activity of paramount importance will tend toward patrilineal lineages because these occupations tend to be masculine pursuits. In systems where woman’s role in subsistence, house building and ownership, or in some handicraft, puts her in a position of considerable importance as compared with men in the mode of life, there will be a tendency toward matrilineal lineages. (The Evolution of Culture)

White adds that although this statement is sound enough, it could easily mislead because of the complexity of numerous, diverse factors at work in specific situations making for small to great variations.

S Lion

London, SE24

Letter: Vodka-Cola (1980)

Letter to the Editors from the March 1980 issue of the Socialist Standard

Vodka-Cola

I should like to express my appreciation for your letter of 11th November and the review of “Vodka-Cola” in the November issue of the Socialist Standard.

I also very much appreciate your positive comments on “Vodka-Cola”, which will be the core conflict of the ’80s between democratic socialism and authoritarian state capitalism.

I also appreciate your comments in the utilisation of the term “socialist” and the loose handling of “Marxism” in the text. I share entirely your definition of the USSR as an example of state capitalism -and not socialism. And, of course, the entire tenor and objective of “Vodka-Cola” is to confirm what you state that the means of production and the distribution of its output have now largely been accumulated by small elitist minority groups whose interests converge on the exploitation and the expense of the majority of the population, and especially those who relate to society through their earned incomes.

Charles Levinson

Geneva

Letter: E.P. Thompson and CND (1980)

Letter to the Editors from the August 1980 issue of the Socialist Standard

E.P. Thompson and CND

A well-known historical figure, with whom I am sure the Marxist historian E. P. Thompson is acquainted, once said that when history repeats itself the first time it is tragedy, but when it does so a second time it is farce. Thompson, in calling for a “campaign for a bomb-free Europe” (Guardian, 28.1.80), lecturing under the title “Protest and Survive” and supporting demonstrations against American Cruise Missiles in Britain, is attempting another farcical repetition of events, fated to follow the same path as did the Campaign for Nuclear Disarmament and Bertrand Russell's Committee of 100.

We must ask ourselves if these utopian popular movements have helped to bring about nuclear disarmament, or even decelerated nuclear stockpiling. The answer must be “no”. Indeed, despite the existence of such groups, hideous wars have continued throughout the world, using not “the Bomb”, but the more conventional instruments of torture and disablement. Do Thompson and his followers wish to reenact past “peace” movements; to initiate yet another naive grass roots campaign?

Alas, it is the same old story. Thompson is seeking to eradicate one particular instrument of war, while ignoring the reason for such instruments; indeed, the very cause of war. Surely war is the inevitable outcome of individual nations striving to protect or extend their respective markets and spheres of influence, to the benefit of their economic and political rulers; that is, the product of capitalism and its inherent rivalries. The pressing need is to extirpate the cause of war, not its tools.

I am sure many would agree that E. P. Thompson is a very talented writer of history: learning its lessons, however, demands a different sort of talent.

Rob Bishop

Eccleshill

Bradford

Too Much Food (1980)

From the June 1980 issue of the Socialist Standard

Capitalism has outlived its usefulness; it has developed the means of production and distribution to a point where abundance is within our grasp. Yet as the twentieth century totters to a close, we still have to contend with the same old problems that were a feature at the turn of the century —unemployment, poverty, bad housing, war and so on, and, in some parts of the world, starvation wipes out thousands of human beings. If these deaths were the result of an unbountiful Nature, of the world being incapable of producing sufficient food for its people, we would be faced with a very difficult problem. But this is not the case.

Capitalism is a system of commodity production — of buying, selling, profit. Sometimes the wheels grind to a halt, with too many cars, carpets, ships, suits or whatever to meet market needs. And "too much" food, even when so many go without; but food, like a car, is a commodity. If too much is produced for the market to absorb production is cut back.

When Russia invaded Afghanistan President Carter, waxing indignant, decreed an embargo on US exports of grain to the Soviet Union, which is heavily dependent on this feedstuff to increase cattle population. The American farmers, who for long have looked on the Russian market as a profitable channel for their surplus grain crops, hummed and hawed, did a bit of tooth sucking but eventually agreed to support Carter. It was supposed to be their sacrifice for the nation's good — but the farmers were not about to turn a shotgun on themselves. It was of course agreed at the time, that the US government would compensate them by itself buying this grain.

The American government has just completed the purchase of 156 million bushels of grain at a cost of 600 million dollars. With this amount of grain around, storage space is at a premium and there is a constant search for any odd corner where the stuff can be dumped. The bottom fell out of the market and as a result many American farmers have gone bankrupt. As those still in business (the majority) plan their sowing schedule for this year, the high cost of borrowing money (US Bank Rate around 20 per cent) for seed and fertilisers is having its effect on the total acreage to be planted. This cost, and the large surplus of grain available, has led one Chicago grain analyst to say . . . "It would be economic suicide to plant at these prices". Prudential Insurance of Chicago, one of the largest agricultural finance houses, has already stopped loans to farmers and does not know when they will recommence.

Food production and selling is big international business. To add to the woes of the American farmer, Canada is planning this year a 6 per cent increase in planting acreage; the Indian harvest looks good; Brazil has just gathered the largest soya bean crop for years and the world stock of grain is the highest for 15 years.

Anyone who thinks this promises well for the starving millions should remember: in the past, grain stocks have been high and yet people died through lack of food. In the Guardian (17 April) a large advert stated that harvest failure has led to a new crisis in Kampuchea. This country desperately needs food to survive, but the profit motive of capitalism ensures that it does not get enough of it. As long as food is produced for sale and profit, then so long shall we have these futile appeals.

When food is produced for the sole reason that people need it then we shall have socialism —a world community based upon common ownership of the means of production and distribution. It will be a way of life divorced from the stupidities of a wages and monetary system. For the good of all, the earth with its riches and potential, harnessed with humanity's creative ability, will provide what we need for a full and meaningful life.

Cyril May

“World Revolution”: another confused group (1980)

From the August 1980 issue of the Socialist Standard

Recent years have seen the emergence of groups who recognise that by socialism Marx meant a society in which goods would no longer be produced for sale and in which people would no longer work for wages. They have not, however, acknowledged that the Socialist Party of Great Britain has been pointing this out for over seventy years. In fact they have some harsh things to say about us. The journal World Revolution, for instance, which styles itself “the British group of the International Communist Current” is on record as describing us as “a completely degenerate bourgeois organisation which can only play a counter-revolutionary role within the working class” and as “a parliamentarian leftist sect renowned for their Menshevism” (WR3). Recently, however, they seemed to have had second thoughts and have upgraded us from “a completely degenerate bourgeois” organisation to a “confused proletarian” one:

  The SPGB has survived since 1904 as a proletarian organisation. While its rigid sectarianism from the beginning tended to inhibit any real contribution to the clarification of the tasks of the working class, it nonetheless stood against both world wars, attacking them as capitalist wars in which the working class had no interest, and denouncing anti-fascism for the anti-working class movement it was. The SPGB also recognises Russia and China as state capitalist, and sees parties of the left and extreme left as parties of state capitalism. But against these class positions it also holds to the view that the working class can only come to power through Parliament and that it can defend itself through trade unions. It is even confused about who the working class is – for example, it sees the repressive arms of the state, the police, as members of the working class simply because they are paid wages (WR11).

The so-called “International Communist Current” is an organisation with supporters in North America and a number of European countries, centred on the French journal Révolution Internationale which has tried to combine the Italian and German “leftwing communist” traditions, both dogmatically anti-parliamentary, attacked by Lenin in 1921 in his pamphlet Leftwing Communism: An Infantile Disorder.

WR holds that capitalism is, and has been since the first world war, in a state of economic collapse due to its inability to find new markets on which to sell its products at a profit. This view is based on an uncritical acceptance of the analysis made by Rosa Luxemburg in her book The Accumulation of Capital first published in 1913. We are told: “As Rosa Luxemburg showed, surplus value cannot be realised within the context of a purely capitalist economy” (WR1).

Rosa Luxemburg did indeed try to demonstrate this, but her argument was based on a simple fallacy. According to her, under “pure” capitalism (an economy where there are only capitalists and wage workers) market demand was determined by consumption (what the workers spend on consumer goods plus what the capitalists spend on consumer goods). If the capitalists were to consume all their surplus value, so her argument ran, there would be no problem, but as soon as they re-invest a part of it – which, the accumulation of capital, is after all the purpose of production under capitalism – market demand is no longer equal to what has been produced. For, the consumption of the capitalists having been reduced, so, according to Luxemburg, has market demand. The result, she concluded, was that there was nobody to buy the products in which the re-invested profits were embodied (new machinery, raw materials and consumer goods for the extra workers taken on).

This argument makes accumulation impossible under “pure” capitalism and Luxemburg did not shrink from this conclusion. In fact it led her to the basic theme of her book: that for capital accumulation to take place there must be non-capitalist areas to buy the part of the surplus product not consumed by the capitalists. It followed for her that capitalism would collapse at the point when there were no more non-capitalist areas left in the world. It is WR’s contention that precisely this collapse began to occur at about the time of the first world war.

Luxemburg had the intellectual honesty to admit that this theory conflicted with the rough notes Marx had made at the end of Volume II of Capital which implied that long-term growth (accumulation) was possible under “pure” capitalism. She therefore tried to show where Marx had gone wrong, but only succeeded in exposing her own utter confusion about economics. She made the silly mistake of assuming that the level of market demand was determined exclusively by consumption (the spending of workers and capitalists on consumer goods) whereas in fact it is determined by consumption plus investment (capitalist spending on new means of production). Thus, when a part of the surplus value is re-invested rather than consumed, market demand is not reduced; it is merely re-arranged: what the capitalists formerly spent on consumer goods they now spend on means of production. Marx had made no mistake.

Of course, to say that capitalism could in theory exist without external non-capitalist markets is not to say that it always has done. External markets did play a key role in the birth and early growth of capitalism. Similarly, to say that there is no permanent underconsumption built-in to the capitalist system is not to say that there is therefore always a smooth crisis-free accumulation of capital. Far from it. Accumulation under capitalism proceeds by fits and starts, but these crises are caused by other reasons than underconsumption: by disproportions between the different branches of production leading to a fall in the rate of profit or, at times, to a temporary retraction of the market demand for consumer goods. Finally, to deny that capitalism is in a state of collapse through inability to find new external markets is not at all to deny that, since about the turn of the century, it has been a reactionary, “decadent” system with no further positive role to play in the history of mankind. By that time, it had already built up the material basis for a world socialist society and so had fulfilled its historic role.

According to WR theory, the period after the first world war was one of imminent “proletarian revolution” sparked off by the collapse of capitalism. In fact, however, capitalism was not collapsing nor were the workers revolutionary in any meaningful sense of the term, that is, imbued with socialist understanding. They were merely discontented with the terrible conditions they had to endure. A minority were indeed prepared to take violent action to try to rectify the situation, but this did not mean they were revolutionary in the sense of wanting and understanding socialism. The great majority of workers, however, as the results of elections held in Britain, France and Germany at the time showed, remained loyal to the political parties which openly upheld capitalism, including by now the Labour and Social Democratic parties.

Lenin too made the mistake of assuming that a socialist revolution in the West was imminent. His justification for the Bolshevik seizure of power in November 1917 was that it was the first step in the world proletarian revolution, a breakthrough by the working class where the link in the imperialist chain was weakest, to be followed fairly rapidly by revolutions in the other countries of Europe and in particular in Germany. In reality the Bolsheviks’ coming to power was nothing of the sort, but was rather the seizure of power by a determined group in the conditions of chaos following the collapse of the Tsarist State under the impact of the war. Certainly, the Bolsheviks claimed to be socialists, but their support amongst the workers had been built up not for socialism but on the slogans “Peace, Bread and Land”. Once in power they never had any choice but to develop capitalism in Russia which they proceeded to do in the form of state capitalism as Lenin was to frankly admit. Thus their coup d’état was essentially only a point in the process of the development of capitalism in Russia, Russia’s equivalent of the French bourgeois revolution of 1798 or rather of the coming to power of Robespierre and the Jacobins in 1793.

WR, however, and the “International Communist Current”, reject this view and proclaim that the Bolshevik seizure of power was a “proletarian revolution” which later “degenerated” into the state capitalism we see in Russia today:

  Its [the Bolshevik Party’s] coming to power in October was one of the highest moments of the proletarian revolution” (WR1). 

  With the recognition of the proletarian character of the October Revolution must come the realisation that the Bolshevik party . . . was a proletarian party of the revolutionary wave” (International Review No.3, p. 1).

The fact that WR regards the Bolshevik seizure of power as a “proletarian revolution” and the Bolshevik vanguard party as (at that time) a “proletarian party” reveals a lot about their own conception of majority, conscious revolution (as WR claims), yet points to the Bolshevik coup (where an unconscious majority was manipulated by a conscious minority as in all previous bourgeois revolutions) as an example of the sort of revolution they have in mind, then their claim, or their understanding of its implications, must be open to serious question. That, despite what they say, they don’t really stand for a majority conscious revolution will be confirmed when we examine their attitude to Parliament and elections.

WR is vehemently opposed to Parliament describing it as a “circus” and us as “parliamentary cretins” for saying that the working class can make some use of it. They favour instead “workers councils” in which their organisation would play a “vanguard” role. Once again this results from the fascination the Bolsheviks have for them.

Tsarist Russia was a political autocracy which did not permit the organisation of normal political parties or trade unions. Thus when it collapsed in March 1917 there were no mass parties or trade unions, or even local government bodies, through which the workers and soldiers could express their views. To fill this gap they formed make-shift representative bodies called “soviets” (which is merely the Russian word for “council”) as they had done before in 1905. The fact that these bodies were make-shift without any formal democratic structure (though there is no reason to believe that they were not more or less representative till the Bolshevik coup) made it easier for them to be manipulated by a determined minority such as the Bolsheviks were.

Lenin cynically proclaimed these councils as a superior form of democracy to Parliament just because their unstructured nature had made it easier for a minority calling itself revolutionary to come to power by manipulating them. WR has inherited this tradition and has not entirely freed itself from the Bolshevik tactic of organising as a “vanguard” to manipulate the “workers councils” they want set up.

On the other hand, socialists reject all forms of minority action to attempt to establish socialism, which can only be established by the working class when the immense majority have come to want and understand it. Without a socialist working class, there can be no socialism. The establishment of socialism can only be the conscious majority, and therefore democratic, act of a socialist-minded working class.

In these circumstances the easiest and surest way for such a socialist majority to gain control of political power in order to establish socialism is to use the existing electoral machinery to send a majority of mandated socialist delegates to the various parliaments of the world. This is why we advocate using Parliament; not to try to reform capitalism (the only way Parliaments have been used up till now, which has inevitably failed to do anything for the working class since capitalism simply cannot be reformed to work for their benefit), but for the single revolutionary purpose of abolishing capitalism and establishing socialism by converting the means of production and distribution into the common property of the whole of society.

No doubt, at the same time, the working class will also have organised itself, at the various places of work, in order to keep production going, but nothing can be done here until the machinery of coercion which is the state has been taken out of the hands of the capitalist class by political action.

In the passage from WR11 quoted at the beginning of this article we are criticised for saying that the working class “can defend itself through trade unions”. We do indeed say this. The existing trade unions are certainly not perfect – they are bureaucratic, they often collaborate with employers and governments, they engage in reformist politics – but at the moment, given the existing low level of consciousness among the working class, they are all workers have to defend themselves. Actually, we do not support the existing trade unions as such; what we say is that we are in favour of workers organising democratically and taking industrial action to defend their wages and conditions, and where possible improve them, against the encroachment of capital, an activity that has in the past sometimes brought them into conflict with the existing trade unions.

And it is not socialists who are “confused about who the working class is”. We say that the working class is composed of all those who are excluded from ownership and control of the means of production and who are consequently forced, in order to live, to sell their mental and physical energies for a wage or salary, irrespective of the job they do. The working class thus includes office workers and civil servants as well as factory workers and miners and, yes, policemen and members of the armed forces. Indeed, it is partly because we know that the state machine is manned largely by members of the working class that we are confident that the socialist working class majority will be able to establish socialism peacefully. For, when socialist ideas begin to spread among the working class it is most unlikely that those in uniform will remain unaffected. When a majority of workers generally are socialists, so will most of their fellow workers in the armed forces be.

Adam Buick

Sport mimics warfare (1980)

From the August 1980 issue of the Socialist Standard

Nearly all the sports practised nowadays are competitive. You play to win, and the game has little meaning unless you do your utmost to win . . . At the international level sport is frankly mimic warfare. But the significant thing is not the behaviour of the players but the attitude of the spectators: and, behind the spectators of the nations who work themselves into furies over these absurd contests and seriously believe—at any rate for short periods—that running, jumping and kicking a bill are tests of national virtue.

George Orwell

Blogger's Note: 

This short quote from Orwell really should have been tagged onto the end of Paul Bennett's article, 'The Olympics: sport as warfare', but I missed it at the time. I'm now making amends.

The quote itself is from Orwell's 1945 essay, 'The Sporting Spirit'.

The Class Struggle in Poland – A Socialist Statement (1980)

From the December 1980 issue of the Socialist Standard

The Socialist Party of Great Britain applauds with sympathy and admiration the courageous stand of the Polish strikers in their struggle to independently organise and negotiate over their wages and conditions. Their action bears out what we have constantly claimed and what no amount of repression, censorship, and pretence can indefinitely conceal. Poland is no “workers’ state on the road to socialism”, but a state capitalist, one party regime, where the working class inevitably comes into conflict with those who control the means of wealth production and distribution. The unity and determination of the Polish workers and the way they have handled their strike does them credit, and shows that their earlier clashes with the Polish leadership have taught them much. Their fight echoes the struggle of British workers in the nineteenth century to organise Trade Unions. They too could not be suppressed despite the Anti-Combination Laws and employers and governments since have been forced to acknowledge and negotiate with them.

The Polish strikers’ actions is being reported in the British Press and on television in a manner which is in marked contrast to the way the media reacts to strikes by British workers. We hear the same whining about “economic difficulties” and the “national interest” that the Polish government is now invoking. But workers have no national interest. All over the world we have a common class interest with each other.

In every country where capitalism develops it can easily be recognised by wage labour, buying  and selling, and production for sale and profit. Those forced to sell their mental and physical energies for a wage or salary—the working class—will come into conflict with those who own and control the land, mines, factories, docks, means of transport, etc—the capitalist class—because their interests are opposed. This happens whether ownership is bound up with individuals, companies or the State. State ownership provides a facade behind which the privileged class extracts its profit. In Poland, Russia, and similar countries that class is the ruling clique of the misnamed Communist Party.

The Socialist Party of Great Britain looks forward to the working class winning independent trade unions wherever they do not exist. Workers will find that trade unions can best defend their interests on the industrial front by insuring that their officials are subject to the control of the membership, that links with political and non-union organisations are avoided, and decisions made democratically. Over 60 years ago Rosa Luxemburg wrote contradicting Lenin to tell him that trade unions without  democracy dominated by communist party leaders would become mere empty shells. Luxemburg was right, Lenin was  wrong.

Necessary and inevitable though workers’ struggles are, their results are limited. Whether promises of economic reform are made with sincerity or cynicism, while capitalism exists workers will find that a system based on their exploitation can never be made to operate in their interest. The next step is for workers to organise a class conscious democratic political party which stands solely for the common ownership and democratic control of the means of production and distribution and rejects action for reform legislation. Such a party must work for the political objective of gaining control of the state machine as a result of majority consciousness for world socialism. No longer will minority ownership of the means of living stand in the way of the general welfare. No wages system between producers and the means of production and distribution. No market standing between people and products. Socialism will be a democratic co-operative system where production takes place for the benefit of the whole community.

Workers of all countries unite with us for world socialism!

Executive Committee

Socialist Party of Great Britain

September 1980

Karl Marx’s Declaration of Principles (1980)

From the May 1980 issue of the Socialist Standard

A hundred years ago this month four men met in the study of Marx’s house in North London: Marx himself, Engels, Paul Lafargue (who was then still living in London) and Jules Guesde, who had come over specially from France.

Guesde (pronounced “Ged”) had played a key role in persuading a conference of French political and trade union organisations in Marseilles in October 1879 to adopt  “the collective ownership of the soil, sub-soil, instruments of production, raw materials” as the aim “the Federation of the Party of Socialist Workers in France”. He was now in London to get Marx’s help in drawing up a declaration of principles for this new party.

Marx dictated to Lafargue, who acted as secretary of the meeting, the following preamble to a list of immediate demands which had been prepared by Guesde for the elections of 1881. We have translated it ourselves from the version which was published on the front page of L’Egalité of 30 June 1880 under the heading “Electoral Programme of the Socialist Workers”:

Considering, 

That the emancipation of the productive class is that of all human beings without distinction of sex or race; 

That the producers can be free only insofar as they are in possession of the means of production; 

That there are only two forms under which the means of production can belong to them:

 1. The individual form which has never existed generally and which is being more and more eliminated by the progress of industry;

2. The collective form whose material and intellectual elements are being formed by the very development of capitalist society; 

Considering, 

That this collective appropriation can only be the outcome of the revolutionary action of the productive class—or proletariat—organised in a separate political party; 

That such organisation must be pursued by all the means which the proletariat has at its disposal, including universal suffrage, thus transformed from the instrument of trickery which it has been up till now into an instrument of emancipation; 

The French socialist workers, in setting as the aim of their efforts in the economic field the return to the collectivity of all the means of production, have decided, as a means of organisation and struggle, to enter the elections with the following minimum programme.[1]

Guesde’s election programme which followed was a list of reforms such as full freedom of the press, assembly and organisation; separation of the Church and State; an eight-hour working day; a legal minimum wage and workmen’s compensation. Marx was not involved in drawing up this programme and was in fact critical of certain parts of it, especially the demand for a legal minimum wage, though he did not contest the desirability of the party adding such a programme of reforms to its socialist objective (one of the points on which we say he was in error).

It is quite clear that this excellent statement of basic socialist principles drawn up by Marx must have been one of the documents before those who drafted our Object and Declaration of Principles in 1904. Its first clause is incorporated, almost word for word, in our Clause 4 and the phrase “instrument of emancipation” appears in our Clause 6 as “agent of emancipation”. According to Bracke, who was a close collaborator of Guesde before the first World War, the words “thus transformed from the instrument of trickery which it has been up till now into an instrument of emancipation” were suggested by Guesde (see his foreword to Programmes Socialistes de Gotha, Erfurt, Le Havre, Spartacus, Paris, 1947). Presumably his source for saying this would have been Guesde (who died in 1922), though Guesde himself is not on record as making this claim. But in any event, whoever suggested the phrase, it was accepted and endorsed by Marx and became part of the terminology of Marxian socialism inherited by the Socialist Party of Great Britain.

All the currently available French versions of this preamble differ from the version published in L’Egalité (and various other French journals) in June 1880. One of these differences is important and has long been a source of embarrassment to us: the inclusion after “means of production” in the second clause of “(land, factories, ships, banks, credit, etc)”. The Pelican translation does not contain this but Aaron Noland, in his The Founding or the French Socialist Party (p.7), quotes this phrase as if it had been in the draft dictated by Marx.

Now, if Marx really had included this phrase, it would have detracted from the value of the document as a very good statement of socialist principles as well as calling into question his own theoretical consistency. For how can there be common ownership of “banks” and “credit” when, as buying and selling institutions, these are features only of a society where private property exists? When there is common ownership of the means of production there will be no money, no buying and selling and hence no banks or other financial institutions, as Marx made quite clear in other of his writings.[2] Besides, banks and other financial institutions are not “means of production” and Marx was always careful about the definition of economic terms.

There were thus two prima facie reasons for doubting that Marx had had a hand in including this phrase. Having looked up the issue of L’Egalité of 30 June 1880 we are now in a position to confirm that it was not inserted by Marx, since the phrase is nowhere to be found in the version published there. All the current French versions are therefore wrong, their publishers not having taken the elementary step of going back to the original source. We can only speculate why, but an important factor must have been that, being either Social Democrats or “Communists”, they saw no contradiction in Marx seeming to suggest that banks and credit would continue to exist in socialism.

Where, then, did this addition come from and who inserted it? In July 1880 the preamble and election programme were adopted by the Centre region (which included Paris) of the French party. The version they adopted, as published in L’Egalité of 28 July, does not contain this phrase nor, more importantly, does the version adopted by the party as a whole at its national congress held in Le Havre in November (Le Proletaire No.114, 4 December 1880).

The offending phrase first appears, together with a couple of other changes, in a version adopted at a Congress held in Roanne in September and October 1882 (see L’Egalité, 8 October 1882). The mystery is now near to solution, since this was the congress at which Guesde and his supporters, who had been outvoted on the issue of maintaining a single national election programme, broke away from the Federation of the Party of Socialist Workers and set up the Parti Ouvrier Francais (French Workers’ Party).

Because of its unwieldy name the Federation had been known popularly as the “parti ouvrier” but this was not its official title. It is thus inaccurate to describe, as has become customary, this document as the preamble or introduction to the programme of “the French Workers’ Party”. Marx did not draft it for this party since it did not exist as such in 1880 but for its predecessor, the Federation of the Party of Socialist Workers in France, to give it its full title. Naturally, as tends to happen when there are splits, the two organisations resulting from the 1882 split both claimed to be the inheritors of the original party and traced their origin back to it. In addition, Guesde, Lafargue and the others in the POF hoped to derive prestige from the fact that their declaration of principles had been drafted by Marx.

And in fact, from 1882 onwards, the POF was the recognised “Marxist” organisation in France and, like the Social Democratic Federation in Britain (formed about the same time), did carry out some useful work in introducing and spreading socialist ideas in France before finally getting bogged down in reformism. Consider, for instance, the following passage by Guesde, written in 1879, in an article “The Social Problem and its Solution” which was translated into English and published in the Socialist Standard  in January and February 1905:

Commercial production of exchange values with an end to realising profit will disappear, and be replaced by the cooperative production of use values for consumption with a view to satisfying social wants.

Alteration to Marx's draft
In view of this recognition that there would be no buying and selling in socialism, it is strange that Guesde and Lafargue should have taken it upon themselves to “complete” Marx’s draft in such a way as to suggest that banks and credit would exist in socialism. In doing so, they distorted Marx’s meaning and blurred the distinction between state capitalism and socialism, the beginning of a process which led to the Social Democratic parties of Europe, in which Marx and particularly Engels had placed such hopes, coming to work in practice for state capitalism rather than socialism.

Guesde and Lafargue had no right to change Marx’s draft and then claim that it had been dictated by him in the changed form in which they propagated it. A mark of their success—and damage—here  is the fact that most people in France who are aware of the document think that Marx accepted the contradiction in the POF version, that is, the “common ownership of banks”. It would be nice if Marx’s famous remark “One thing is certain, I’m not a Marxist” (Engels’ letter to Bernstein, 3 November 1882) had been occasioned by this change to his 1880 draft, but there is no evidence at all for this conclusion! It was, however, made in connection with the Guesdists.

We shouldn’t be too hard on the Guesdists though, since they had some influence on the early thinking of the SPGB. Marx’s preamble, for instance, would only have been known to our founder members in the form of the “considérants” to the programme of the Guesdist Party. The POF, after becoming “the Socialist Party of France” in 1901, joined the united Social Democratic party in France set up in 1905 under the auspices of the Second International. The Guesdists continued to exist as a group with their own publication Le Socialisme. The early Socialist Standards contain a number of articles translated from this journal. For instance, an article by Guesde on “Legality and Revolution” (February 1908), one by Lafargue on “The Law of Value and the Dearness of Commodities” (May 1908), two articles by Charles Rappoport, author of a number of books and later a leading theorist of the French “Communist” Party (September 1908 and April 1911) and a short, and not very consequential, article by the Bracke we have already mentioned (January 1910). There were others too. In addition, our traditional definition of the State as “the public power of coercion” comes from the early Guesdist (later an open reformist and top French diplomat) Gabriel Deville.

So, when our supporters in France are numerous enough, the declaration of principles of the party they will form will not be something totally alien to the French working class political tradition, but will include passages originally drafted by Marx for a French workers organisation.

Adam Buick

[1]  An English translation also appears in The First International and After, in the Pelican Marx Library, but contains a mistake, probably because it was re-translated from the German and not directly from the French. Instead of "That such consideration must be . . . " it has "That this collective appropriation must be . . ."

[2]  "As soon as the means of production cease being transformed into capital (which also includes the abolition of private property in land), credit as such no longer has any meaning" (Capital, Vol III, Moscow, p. 594).

Socialism and Trade Unions (1980)

Party News from the May 1980 issue of the Socialist Standard

Many people think the Trade Unions run the country. Others believe they are at the root of all social problems. Trade Unions are certainly front page news, and the Tory Government has promised to "put them in their place”.

The Socialist Party of Great Britain has just published a new pamphlet giving our analysis of Trade Unions, their uses and limitations and the urgent need for workers to consider the socialist alternative.

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“The Socialist Party of Great Britain has a distinctive view of the problems facing the Unions. It is that, necessary as they are to prevent employers depressing wages, the Unions are strictly limited in what they can achieve for their members within the capitalist system of society out of which Unions arise and within which they operate . . .”

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“The trade union weapon for bringing pressure to bear on the employer is the strike, by means of which production can be halted. It is however effective only when market conditions are such that the employer can sell at a profit all that is produced.”

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“Trade Unions, fighting the same old battles over and over again, offer no way out of the dead-end of capitalism. There is nothing the Unions can do which wall substantially alter the way capitalism works. However, there is a solution, the one for which the Socialist Party of Great Britain is organised. It is the replacement of capitalism by socialism — which, it must be emphasised, has nothing to do with nationalisation or with having capitalism run by a Labour Government.”

The Evolution of Money: From Barter to Inflation (Pt. 2) (1980)

From the March 1980 issue of the Socialist Standard

Link to Part 1.

Paper token money was re-invented in Europe in the 17th century when goldsmiths began issuing receipts to those who had deposited gold with them. These receipts came to be accepted as a means of payment because people knew that they could convert them into gold at any time. This is one of the origins of the modern banking system. At one time any bank could issue its own notes, but later this became, in most countries, a government monopoly—in Britain through the semi-official Bank of England.

The first paper notes were "as good as gold" in the sense that they were convertible on demand into a fixed amount of gold laid down by law. For nearly one hundred years from the end of the Napoleonic Wars to the outbreak of the First World War notes in England were fully convertible into gold at a rate of about ¼ oz per £. During this period the "I promise to pay the bearer on demand the sum of five pounds" (there were no £1 notes then) meant that the Bank of England would give you about 1¼ oz of gold for the note. Now you will only get another note.

With convertibility, the management of a paper currency is relatively easy, since the number of notes in circulation is regulated by the economy as its demand for money rises and falls.

Convertibility of paper notes into a fixed amount of gold was suspended in Britain during the First World War, resumed in 1925 and abandoned in 1931. Currency today in all countries is inconvertible paper (token) money (topped up by metallic coins). The problems of managing an inconvertible paper currency are immensely greater than those of managing a convertible paper currency since it is the monetary authority itself which now has to gauge how much money the economy needs. The amount is no longer more or less automatically regulated by the economy itself, but is determined by the government through its monetary authority. It is not impossible to get the amount approximately right from studying economic trends (level of economic activity, growth of population); it was done in the Weimar Republic after the terrible runaway inflation immediately after the First World War as well as in Britain after 1920. But governments with a monopoly in the issue of inconvertible paper currency face the same temptations as the rulers in the past who issued debased coins: printing money can serve as an easy source of finance. Indeed, convertibility was suspended during the First World War (as it had also been during the Napoleonic Wars) precisely in order to finance the war.

The effect of over-issuing inconvertible paper notes is exactly the same as debasing gold or silver coins: a rise in the general price level. This inflation is in fact the modern equivalent of debasement. It is the depreciation of an inconvertible paper money just as debasement is a depreciation of coined real money.

The word "over-issue" of course implies that there is a "correct" amount of an inconvertible paper currency to misuse. This "correct" amount is that whose face-value equals that of the gold which would be in circulation were it the currency, the amount (total weight) of gold that the economy requires as determined by the formula we discussed last month (no. of transactions x total prices, divided by the velocity of circulation of money).

Suppose that, with inconvertibility, "pound" continues to be defined as ¼ oz of gold and suppose that the amount of money required by the economy, measured in weights of gold, is 100m. oz. To be correct — not to be over-issued — the face-value of the inconvertible currency must total £400m. This is the only amount which will maintain the definition of one pound = ¼ oz of gold.

Inflation as a policy
If the government issues, say, notes with a face-value of £800m, or 100 per cent more than the economy requires, what will happen? The economy still needs the same amount of money, measured in terms of the weight of the money-commodity, as before — 100m oz. of gold. The issue of a paper currency with a total face-value above this figure — and £800m would be the nominal face-value of 200m oz of gold — will not alter this. What will is the real, as opposed to the legal amount of gold designated by the word "pound". £800m, instead of representing 200m oz of gold, will become, in economic practice, the equivalent of 100m oz. "Pound" will change from being the name of ¼ oz of gold to be the name of 1/8 oz (100/800).

The standard of price will have effectively been changed so that, as with a debased coinage, all prices will rise — in this case by 100 per cent, the same proportion as the over-issue of the currency. Once again, this rise won't take place all at once but will gradually work its way through the economy till the general price level has risen by 100 per cent.

The over-issue of an inconvertible paper currency, or inflation, always results in an increase in the general level of prices. This has been confirmed so many times that it can be regarded as an established law of monetary economics.

Over-issuing an inconvertible paper currency has been the cause of the continuous rise in the general price level since the last World War. Governments everywhere have resorted to inflationary currency policies because this is an easy way of raising money to finance their spending — and of course government spending has grown immensely this century. But there is a difference compared with past inflations. In the past when governments inflated the currency they knew exactly what they were doing and what the result would be. Thus the government during the First World War knew full well that the result would eventually be a rise in prices. But today governments seem no longer to realise that there is this direct causal link.

The economics of inconvertible paper currencies has been forgotten under the influence of economic thinkers who proclaimed that they had devised new and better theories. The man mainly responsible for confusing the question here is John Maynard Keynes (1883-1946). Keynes, who was already a leading British economist in the 1920s was at one time aware of the consequences of currency over-issue, but that was before he developed his "general theory of employment, interest and money", the title of his major work published in 1936.

In this work Keynes argued that, in order to ensure full employment, governments should concentrate on trying to control the economy by appropriate tax and spending policies. He relegated monetary policy to a secondary role, saying that it should be framed to fit in with the government's tax and spending policies. Governments interpreted this as meaning that they could safely issue whatever amount of money they needed to carry out their policies, without having to worry about whether or not this might be more than the economy needed. Predictably, they over-issued the currency and the general price level rose.

The first Keynesian budget was that of 1940, when inflation was once again deliberately adopted as a way of financing the war. This policy was continued after the war to finance other government spending, including that on social reform measures (education, health service, social security benefits). While the post-war boom lasted it seemed to some that Keynesian policies had at least achieved the aim of full employment, if not that of a stable price level, and Keynes' view that a certain amount of inflation encouraged investment came to be generally accepted. This myth has now been exploded, as recent years have seen growing inflation accompanied by growing unemployment. As a result Keynes is now almost completely discredited (though he still has a few supporters left in Labour Party and TUC circles). Keynesian economics is now being replaced by a new school known as the "Monetarists" (because they reject Keynes' teaching that monetary policy doesn't matter) who at least realise the connection between an increase in the "money supply" (however defined) and an increase in the general level of prices.

Printing £ notes!
When it is said that government spending is financed by recourse to the printing press, this should not be taken to mean that the government simply prints more paper notes and uses them directly to pay, for instance, its suppliers or civil service salaries. This does indeed happen in some countries but in Britain the method is not so crude as this. What essentially happens is that the government always makes available enough credit for the banking system (commercial banks, discount houses) to be able to lend it whatever it wants. The process works something like this: (i) the government, through the Bank of England, sells bonds to the Big Four Banks (Barclays, Lloyds, Midlands, National Westminster); (ii) to get money to pay for these bonds the banks call in some of the short-term loans they have made to the discount houses; (iii) the discount houses go to the Bank of England which, as the lender of last resort, lends them what they need, at a price — what used to be called the bank rate. The resulting increase in credit in the banking system means, sooner or later, an increased demand for currency (notes and coins). This the Bank of England, as the note-issuing authority, passively makes available by a simple transfer from its Issue Department to its Banking Department. As and when necessary the former arranges for more notes to be printed. So lax is control over the issue of notes these days that Parliament is told afterwards by a mere Treasury Minute which passes automatically unless challenged.

The politician in Britain who comes closest to a real understanding of inflation is Enoch Powell. But there is one thing lacking in his analysis: a concept of what would be the "correct" amount of convertible currency to issue to maintain price stability, or, what is the same thing from another angle, its purchasing power. Powell lacks this concept because it can only be explained on the basis of Marx's Labour Theory of Value (1) and the last thing that Powell is (or wants to be) is a Marxist!

Inflation can be understood only after the acceptance that money is itself a commodity, a product of labour produced for sale, having its own value determined in the same way as that of other commodities (by the amount of socially necessary labour incorporated in it). Despite the surface appearance, gold is still the money-commodity, both internally and for external trade. It has been replaced as the circulating medium by tokens, the metallic coins and coloured paper notes we use in everyday transactions, but is still the ultimate standard of price.

It is still gold that determines whether or not a currency has been over-issued. The various paper currencies of the world are still defined, in economic reality, as weights of gold, even though most of them are no longer legally so. This economic definition of currencies in terms of weights of gold is continually changing; their "gold content" is being continually reduced as a result of inflation.

Although it follows from the Marxian analysis of inflation that the continual rise in the general price level could be stopped by strictly limiting the issue of paper money, it is not the business of socialists to tell the capitalist class how to run their economy. We must not be understood as advocates of a non-inflationary monetary policy since we are against capitalism with or without inflation. An end to inflation would not leave workers much better off; their struggle to defend wages and conditions would still have to continue whatever the currency policy of the government.

We are for a system of society in which inflation could not arise as there would be no money. On the basis of the common ownership of the means of wealth production and their democratic control by the whole people, wealth can be produced in abundance to satisfy people's needs. In socialism every man, woman and child will have free access to the abundant store of wealth set aside for individual consumption. There will be no need for money. Further, being based on common ownership, there will be no private property and so no basis for the exchange of goods out of which money evolved. A moneyless society, then, is our answer to inflation.

Adam Buick

(1) Marx explains inflation clearly and simply in the section on "coins and symbols of value" in Chapter III of Vol I of Capital.

Opportunism Knocked: Bradford Debate With SWP (1980)

Party News from the March 1980 issue of the Socialist Standard

The lively and well-attended autumn debates between the Socialist Party and the Socialist Workers’ Party in Bradford were also revealing. Each highlighted the SWP’s complete lack of a class viewpoint and their opportunist support for any section in society who claimed a “special” grievance.

In the second debate, the SWP speaker boasted of his support for the most “Right wing” national liberation groups against his own ruling class. No talk from the SWP of the Socialist idea of the self-organisation of the working class irrespective of nationality, with world socialism, rather than the redrawing of national boundaries, as their aim.

Behind a veil of hypocrisy about the need for workers to reject their leaders reared the ugly head of Trotskyist elitism, with its view of the workers as sheep to be led (no prizes for guessing the shepherds). Time and again the SWP endeavoured to draw the audience into its web of trendy reformism, manifesting itself in such pressure groups as the Anti-Nazi League, led by their Che Guevara, Peter Hain, and that guitar-strumming leftist Tom Robinson; various women’s groups, and the “Right to Work” campaign, telling us all that it is indeed our right to be exploited! Such prescriptions for our ills, misleadingly attractive in their initial emotional appeal, are futile and dangerous blind alleys for workers. Yet these reformist movements were proudly held up as examples of Marxist theory in practise.

Both socialist speakers pointed out that for all the lip-service paid to socialism by the SWP, all they had to offer the audience was the “fight” for immediate demands, from the provision of a coffee-machine locally to the national banning of the National Front. Such reformist struggles indicate the SWP attitude of “Blow the disease, let’s fight the symptoms”. The socialist speakers’ answer to this utopian line of thought was that the immediate abolition of capitalism and the implementation of socialism is the only realistic way forward, precisely because the social problems thrown up by the capitalist system are insoluble within capitalism, that the struggle to build up a mass working class movement, rather than the idealistic demands for full employment or a mere change of political leaders, that on both occasions the SWP speakers so vehemently rejected.

In reply, most of the SWP’s speakers’ time was focussed on the SPGB’s refusal to ally with the so-called “Left Wing” to fight off the extreme right—to vote Labour at elections to keep out the Tories and the National Front. In answer to this, our speaker expressed the Socialist Party’s non-compromising opposition to capitalism, “be it run by politicians wearing jack-boots, or by politicians wearing denim jeans”.

Finally, all the SWP could offer was the romantic policy of “getting the workers into the day-to-day struggles”. All very well, for those non-socialists who like that sort of thing—but let them do it under a banner other than socialism.

RNW

The Evolution of Money: From Barter to Inflation (Pt. 1) (1980)

From the February 1980 issue of the Socialist Standard

Since inflation is a monetary question and nothing but a monetary question, it cannot be understood without first knowing what money is. To most people money is the notes and coins they use to buy things, a convenient technical device for ensuring the smooth exchange and distribution of goods. While it is indeed such a medium of exchange, the currency we use today is not, strictly speaking, money at all, but only tokens for it. But to explain money it is convenient to start with this role of medium of exchange.

Exchange, as the exchange of goods, only exists in societies where there is private property: the goods involved pass from one property owner to another. In societies where there is no private property, where wealth is regarded as the common property of all the members of society, there is no exchange. People don't get what they need through exchange but directly, either by being given it or by taking it in accordance with established rules for sharing wealth. The original human societies were organised on this basis, without property and without exchange –and without money.

Exchange probably originated not within such primitive communistic societies but between them, and would have been on the basis of barter, the direct exchange of so much of one good for so much of another. Barter is the most primitive form of exchange and has obvious problems which don't need explaining at length. A person with two pots who wants a blanket must find another person with a blanket who wants two pots before any exchange can take place. At a certain stage in the evolution of exchange, the need becomes apparent for a good which can be exchanged for all goods. Then the person with the two pots can exchange them for this good and then later exchange this good for a blanket. The good that can be exchanged for all other goods is precisely money, and this gives us the basic definition: money is the good or commodity that can be exchanged for all others.

Various goods have functioned as money in the history of humanity, from cowrie shells to cattle (the word 'pecuniary' comes from pecunia, the Latin word for cattle), but in the end the most convenient have proved to be the precious metals, silver and gold. With barter, goods exchange in proportions determined by the amount of time it took to make them. Primitive people would have had a pretty shrewd idea of how long it took to make particular goods and would have regarded an exchange as fair where the goods involved had taken more or less the same period of time to make (or to gather from nature). Thus, if two pots habitually exchanged for one blanket, a blanket took twice as long to make as a pot.

In other words, commodity exchange is essentially an exchange of equivalents. When one good becomes money, this is not altered. The person with the two pots is not going to exchange them for the money-good unless both goods are considered equivalents. The money-good itself must therefore have value, must be the product of labour. This leads us to the second function of money, that of being a store of value. Someone who has exchanged their goods for the money-commodity is not obliged to exchange the latter straight away for some other good. They can keep and, if wanted, store and accumulate the money-good.

The money-commodity can best perform its role if it is not too bulky — if, in other words, it concentrates a relatively large amount of value in a relatively small bulk. This is precisely what the precious metals do. They are 'precious', or valuable, because it takes considerable labour to obtain a small amount of them. This feature would be a disadvantage had the precious metals not another characteristic — that of being easily divisible. A precious stone such as a diamond also concentrates much value in a small bulk, but because it cannot be easily divided it can't serve as the money-commodity, since the differing values of goods to be exchanged (the different times it took to make them) demand that the money-good be available in finely distinguished different amounts.

The precious metals, gold and silver, because they possessed these two features and had a fairly stable value, eventually emerged everywhere as the money-goods. Once one good has become money then exchange becomes buying and selling. Selling is the exchange of a good for the money-good, while buying is the exchange of the money-good for a good. This is still the case today but is no longer obvious because of the complications brought about by the subsequent evolution of money. The price of a good is its labour-time value expressed in amounts of the money-good. (1) This, being the standard of price, is money's third function. Prices were in fact originally expressed directly as weights of gold or silver.

The next stage in the evolution of money is the introduction of coins. About 2,500 years ago a ruler of Lydia (now Turkey) struck the first coin by stamping its weight on a piece of precious metal (electrum, an amalgam of gold and silver). This stamp served as a guarantee that it really did weigh the amount indicated. And this is all coined money is: a piece of the precious metal which is the money-commodity stamped with a guarantee of weight. At first anybody could issue coins, merchants as well as rulers, but this soon became a government monopoly.

The names of coins were originally weights of the metal of which the coins were made. Thus a pound (£) was originally, in early medieval times, a pound (lb) of silver. But over the years, if only because coins lose weight through wear and tear (but in practice for other reasons as well, as we shall see), the names given to coins came to differ from the names of the units of weight. This did not mean that the money-commodity had ceased to be measured in terms of weight; it merely meant that the money-commodity could always be translated into the more usual unit. Indeed, the new unit of monetary weight was legally defined in terms of the general unit of weight. Thus, in Britain for most of the nineteenth century, the gold coin known as a sovereign or pound was legally defined as being slightly more than a quarter of an ounce of gold (one ounce of gold was equal to £3 17s l0½d). In other words, 'pound' was an alternative name for about a quarter of an ounce of gold. Similarly, other names of currencies – dollar, mark, franc –were also alternative names for (other) weights of gold (or silver).

Gold and silver coins can lose weight not only through wear and tear but also through people deliberately filing them down, a criminal offence generally punished in the past by death. But there was a third way which was perfectly legal and unpunishable, since the 'criminal' was the government itself! Governments discovered soon after the invention of coins that issuing underweight coins – stamping one weighing, say, only 0.24 ounces as a 'pound' or 0.25 ounces –was an easy source of finance, at least in the short term. Such debasement of the coinage, however, had an unfortunate side-effect: it led to a rise in prices, not just of some goods but of all goods, a rise in the general price level. Since exactly the same mechanism operates here as with modern inflation, let's examine it in more detail.

Exchange, remember, is the exchange of equivalents (of equal amounts of socially necessary labour), selling is the exchange of a particular good for a certain amount of the money-commodity; and price is the expression of the value of a good in terms of amounts of the money-commodity. Say that four blankets are worth the same as an ounce of gold. That means that it takes as much socially necessary labour to produce four blankets as it does to produce one ounce of gold. The price of one blanket would then be a quarter of an ounce of gold, or £l.

This is an underlying real economic relationship which remains in force whatever the government does. If the government debases its coins by stamping 'pound' (quarter-ounce) on coins weighing only one-eighth of an ounce, (2) then this economic reality does not change. One blanket will still tend to exchange for a quarter-ounce of gold. If the government, by debasing the coinage, in effect changes the weight designated by the name 'pound' from a quarter-ounce to one-eighth of an ounce, then the price of one blanket will no longer be £1, since this now signifies one-eighth not one quarter of an ounce. The price will now be £2, the new way of indicating a quarter-ounce of gold. All other prices will also rise in the same proportion of 100 per cent. Prices will in fact tend to rise in the same proportion that the coinage has been debased. This would not happen immediately and all at once but would be spread out over a period of time as the effect of the debased coinage worked its way through, but the end result will be the 100 per cent rise in prices.

What will have happened is that the government's action will have changed the standard of price. This is a purely monetary matter and is in the end just a question of definition, of the weight of the money-commodity named by the word 'pound'.

The general level of prices can also change for real economic reasons as well as through the action of a government, intended or otherwise. If the amount of socially necessary labour required to produce an ounce of gold changes — if its value changes — then the prices of all other commodities are necessarily affected. To come back to our example of four blankets equal to one ounce of gold, we saw that this meant that four blankets and one ounce of gold contained the same amount of socially necessary labour, let us say five hours. Suppose that as a result of a new mining machine the average time it takes to produce one ounce of gold falls by ten per cent, to 4½ hours, while the time taken to produce four blankets remains unchanged. Four blankets will now no longer tend to exchange for one ounce of gold but for the amount of gold that can now be produced in five hours, 1.11 ounces. Since no government monkeying with the currency is involved here, 'pound' remains the name of one ounce of gold, so the price of four blankets now rises to £1.11. This happens to the price of all other goods too. This has in fact occurred a number of times in history, the last being in the thirty years up to the First World War when the value of gold fell due to the opening up of the South African and Alaskan gold mines.

A rise in the value of gold, on the other hand, due for instance to geological difficulties in working mines as they get older, would have the opposite effect, leading to a fall in the general level of prices.

The amount of money in circulation — the total weight of the coins made of the money-commodity (say, gold) which circulate as the currency — is determined by the workings of the economy and depends on three factors and their changes in particular:

1. the number of buying and selling transactions to be carried out, or the level of economic activity;
2. the total of the prices of the goods and services involved in these transactions (reflecting their value as measured by the amount of socially necessary labour they contain);
3. the average number of transactions carried out by a single coin in a given period (since coins of course circulate and are not cancelled after use), or the 'velocity of circulation' of money.

Other factors can be introduced, such as the number of debts to be settled and taxes, to be paid, and their amounts, but the basic formula is:

• Amount of money (total weight of gold) needed =
• Number of transactions x total price Velocity of circulation

This has been expressed algebraically as M = TP/V, and is known in the history of monetary theory as the Quantity Theory of Money.

Various versions of it exist, not all of which are correct. But if it is understood not as an equation but as a formula for what determines the amount of money (weight of gold coins) needed by the economy, then it is a key concept for understanding inflation. For it is saying that the amount of money needed by the economy at any time is a real economic fact determined by other economic facts, and as such not something that can be changed at will by government action. In fact it continues to be valid even when gold itself does not circulate as the currency and has been replaced in this role by paper and metallic tokens.

Adam Buick

1. "A relation between a weight of metal and the value of an object" is how Belgium's leading economist, Fernand Baudhin, who died in 1977, defined price in his Dictionnaire de l'économie contemporaine (1973 edition).

2.  This of course is an unreal example, but the mathematics is easier to follow.

Link to Part 2.

Memo to Sir John Methven (Secretary, CBI) from Karl Marx (1980)

Quote from the March 1980 issue of the Socialist Standard

Nothing is more absurd than to explain a fall in the rate of profit by a rise in the rate of wages. The rate of profit does not fall because labour becomes less productive, but because it becomes more productive.

Capital III, p 281

Southend Branch (1980)

Party News from the March 1980 issue of the Socialist Standard

A Bye Election is pending in Southend East, and the local Branch wish to take advantage of the political interest that will arise. They intend to distribute several thousand copies of a Socialist Manifesto, canvassing, literature selling etc. Whilst the date of the Election is not yet known, sympathisers and readers of the Socialist Standard in the area who wish to take part in this work should contact the Branch Secretary.

Fallacious Arguments: The Threat of War (1980)

From the June 1980 issue of the Socialist Standard

It would be rather nice were we not all blown up in a nuclear war, but it is by no means certain that we shall not be. Why is this? Perhaps there has been a conscious and reasoned decision on the part of the world's population to put an end to the unsatisfactory standard of life. After all, did Dostoevsky not say that suicide was the only form of freedom? If the rush to mass destruction is the result of a world debate, in which a majority expressed the opinion that life on earth is no longer worthwhile and we should all transfer to the mythical kingdom of God, why were socialists not invited to put our ideas to it? The reason is that there has not been such a debate. Unlike the inconsequential matter of whether or not the British capitalist class should join the Common Market, there has been, and will be, no referendum to ask "the public" whether they fancy being blown up. There is nothing democratic about war.

Exterminating human beings seems to be an unintelligent way of running a society, especially when it is considered that the main purpose of a society is to ensure the survival of its inhabitants. One would think that any system of society that ceases to ensure survival would meet with the disapproval of its members. But there are a number of currently popular arguments that are intended to justify mass legalised murder:

1. The economic argument. War can be profitable for one or other of the sides.
2. The philosophical argument. Rationality is an inadequate method of explaining and solving social problems. We should recognise that humans will sometimes act in ways that cannot be explained and the causes of war are attributable to such inevitable irrationality.
3. The moral/religious argument. The enemy in war is invariably immoral, valueless and ungodly and thus deserves to be killed.
4. The anthropological argument. Men like fighting because they are naturally aggressive. (And women like bandaging their wounds because they are naturally caring and impressed by the virility of warfare.)
5. The political argument. Murder is right when it is in defence of the Queen/President/State/State-to-be/ideology.

Such justifications of war are wholly unworthy of popular acceptance. Yet they prevail, which must either mean that the majority of people agree with them, or that the majority of people are excluded from making decisions about their own survival. To account for both possibilities, we shall first consider why the above-mentioned "justifications" are unworthy of working class acceptance, and we shall secondly consider the means by which the majority of the world's population can voice our rejection of war.

THE ECONOMIC ARGUMENT

Wars in a capitalist society are concerned with profit accumulation, the concentration of wealth and power into the hands of a class that owns and controls the means of wealth production and distribution. According to the recently published report of the Royal Commission on the Distribution of Wealth and Income, 1 per cent of the British population owns more wealth than the bottom 80 per cent. Wars are not fought between the owners and non-owners of wealth, but between one set of owners and another. Every war in the history of capitalism has been fought, directly or indirectly, to secure markets or raw materials. Russia and China, as much as their power rivals in the West, are concerned with this squalid battle over who owns what in and on the earth, for they are both state capitalist countries obsessed, no less than their avowedly capitalist enemies, with markets and profits. If it were made clear to the majority that wars are fought to protect and expand the prosperity of a minority class then the workers, who are expected to fight the wars and who gain nothing, would cease to accept the economic argument. The businessmen of seventeenth century England responded in this way when many of them refused to finance the commercial adventures of William III: they realised that there was nothing in it for them and so told William what he could do with his foreign policy. The economic nature of modern war is disguised by conditioning the majority to believe that the interests of society (survival) are the same as the interests of the owners of the means of life (profit). Their battles are our battles. We die for them, they live off us. Nation first.

More enlightened members of the working class will recognise that the struggle that should concern them is not that between rival sections of the capitalist class, but that between the two main classes of society: those who possess but do not produce and those who produce but do not possess. They will realise that the power and wealth of the capitalists results from the acquiescence of the working class to exploitation, to be paid wages that are less than the value of the commodities that they produce. In September 1914, The Socialist Standard published a statement on war that made clear the real interest of the working class:

"Whereas the capitalists of Europe have quarrelled over the questions of the control of trade routes and the world markets, and are endeavouring to exploit the political divisions and blind passions of the working class of their respective countries in order to induce the said workers to take up arms in what is solely their masters' quarrel, THE SOCIALIST PARTY OF GREAT BRITAIN, having no quarrel with the working class of any country, extends to our fellow workers of all lands the expression of our goodwill and Socialist fraternity, and pledge ourselves to work for the overthrow of capitalism and the triumph of Socialism." 

The plunder of war is part of the economic rationale of capitalism and so it is no use complaining about "unjust" wars. What is required is a social system in which the material interest of the many rather than the few is what constitutes justice.

THE PHILOSOPHICAL ARGUMENT

Ever since the Enlightenment of the eighteenth century there has been a school of thought that has rejected rationality as a way of explaining and changing social affairs. Irrationalists argue that human beings are motivated by inexplicable accidents of sentiment and that it is impossible to work out a method of understanding how and why social phenomena occur. Faith, trust and sensual responsiveness are the guidelines to which they direct. Many fascists in the early twentieth century argued that the inhumanity of society was due to innate stupidity, malleability and lack of consciousness on the part of the mass of people. "The masses" were seen as stooges to be used by an elite for its own purpose. The link between such anti-democratic beliefs and the similar beliefs of Leninism is based upon a common perception of the limitations of human self-assertion. The Irrationalist idea of "the masses" has understandable appeal among those who seek to lead people. It supposes that only a minority is capable of scientific thought, that most people are blended into the crowd and have no desire to act in their own interests, and that consequently irrational events like war are inevitable. Such views are likely to be attractive to "intellectuals" who imagine that they are members of the intelligent minority and are not as susceptible as the masses.

It is not justifiable to conclude that irrational social behaviour is an inevitable human feature. In an anti-social environment like capitalism, that contrives to keep its wage slaves in the most degraded, unfree and stupid condition, the forces of rationality are fighting an uphill battle. But the contradictions of capitalism will force workers to see the folly of their own irrational ideas.

THE MORAL/RELIGIOUS ARGUMENT

Moralists and religious believers are forced to present rewards for being good and punishments for evil-doing. So, if you kneel in the church and obey the law you get to heaven, and if you are hungry and steal some food you go to Hell. When wars take place moralists are brought in to tell the fighters that they are doing God's work because the enemy is evil. One of the early members of the Socialist Party of Great Britain said that the sight of the priests blessing the guns in 1915 made him first consider becoming a socialist. In the last war the messengers of God blessed the aeroplanes of both the British and the Nazis before they went off to carry out their respective holy missions of murder.

Most workers accept morality because they feel powerless to reject the guidance of their rulers. The church encourages this sense of impotence by telling us that not only is it sinful to kill, but it is unpatriotic and sinful not to kill when our masters so decide.

THE ANTHROPOLOGICAL ARGUMENT

Anthropologists who have asserted that homo sapiens is essentially aggressive have been opposed by many empirical observations. Where there is a social harmony of interests, non-aggressive, cooperative people are found. It is not "human nature" for men to wish to kill one another, and if it is why do they have to wait for a legal decree before war can commence? The anti-social conception of mankind is not indicative of inherent human characteristics, but of a system that forces people to act inhumanly and, in that sense, unnaturally. The myth about "the Glory of War" has been somewhat exposed by stories that have followed the war in Vietnam: war is not about bravery and heroism, but about the indignity of plunder and the inhumanity of slaughter. Of course, there might be some people who do wish to kill other people for pleasure. But should society accommodate the perverse tastes of the would-be killers? At present it does, and we are told that "It's a Man's Life in the Army".

THE POLITICAL ARGUMENT

The least convincing justification of war is the argument that murder is alright if it is in defence of something that people fanatically believe in. For example, there is no doubt a considerable number of people in Britain who would be prepared to lay down their lives for the Queen. Perhaps it would be a solution if they were simply to lay down their lives and be given honorary peerages; this would at least prevent involving those of us who do not want to die on behalf of monarchs, nations or beliefs. Islamic fanatics, left-wing insurrectionists and nationalists like the IRA are not only claiming the right to die for their cause, but are demanding that other workers die with them. A system of society that compels workers to fight for a nation that they do not own is urgently in need of being removed. If there is a nuclear war – or even a serious conventional war – millions of workers would die in defence of countries that are not and cannot be theirs. The workers have no country and therefore no worker should fight in a war.

There is no need for war, just as there is no natural need for poverty or mass starvation or housing shortages or hospital waiting lists. It is because society is organised to provide profits for the few rather than satisfaction for the many that these problems face us. There is no immediate likelihood of the world being destroyed by natural means, but there is more than a slight probability that it will be destroyed by the social madness of mankind, a madness that is created and maintained by the long outdated ideology of capitalism.'The working class has only to say "stop" and the entire present. system of society will cease to be. We have only to take the means of wealth production and distribution into the common ownership and democratic control of the whole community to put an end to the need for fighting over markets and resources and frontiers. We need only withdraw our consent to capitalism, in a majority, to set in motion the revolution from the pre-history to the civilised history of society. Or alternatively, perhaps we ought to pray to the sky that we're not blown up. At least that way one cannot be accused of being naive, or worse still, of being a social revolutionary.

Steve Coleman