Finance and Industry: Who are the share-owners (1962)

The Finance and Industry column from the August 1962 issue of the Socialist Standard

Who are the share-owners

Last month we reported on the new campaign being organised to encourage British workers to buy more stocks and shares. We also quoted the estimates made by the organisers about the number of shareholders in the country.

The New York Stock Exchange has now provided details of the number of shareholders in the United States. These are estimated at about 17 million, an increase of over 10 million in the last ten years.

The U.S. correspondent of the Financial Times, giving these figures, comments that in happier times they might have been a cause for congratulation, but that recent events have given “people’s capitalism” a rather tarnished look. Judging by the panic and disillusionment that hit many of these small investors in the recent Wall Street shake-up, he is certainly right.

High pressure salesmen

One result of this shake-up has been the questioning of the methods that have apparently been used by many U.S. Stock Exchange firms to get business. They have been using a large army of part-time salesmen to go round getting people to buy stocks and shares just as they would soap or toothpaste. Some of them have even been selling extremely doubtful issues in such industries as electronics, automatic vending machines, etc., which have turned out to be virtually worthless. We wonder how many of the 17 million have been accounted for by this sort of dubious activity?

Beyond the curtain

In view of the way production and distribution are carried on in Russia and her satellites, Socialists would not suppose that the trading and financial problems there would differ essentially from what we have here.

It suits ill-informed writers in the Press to keep plugging the theme that it is quite astonishing that capitalist Russia should behave like a capitalist power—but what else would they expect?

In the early part of July, a two-week international summer school of bankers was held in Moscow to enable the foreigners to learn about the Russian banking system. (Last year they met in Oxford). The British visitors numbered 35 and represented the big five joint-stock banks as well as the Bank of England and the merchant banks. More than 50 countries were represented, including the U.S.A. and many of the newly formed African and Asian countries.

Innocents who suppose that things are really different in Russia may wonder why Russia needs to encourage such an affair. But Russian industry is engaged in producing goods for sale at a profit in home and foreign markets and has just as much need of a vast banking and finance apparatus as has the rest of the world. It has not at all been able to escape the necessity of finding markets for exports and has been no more successful than its Western rivals. If Britain has problems which lead some industrial groups to favour entry into the Common Market, Russia has her own difficulties in COMECON (The Council for Mutual Economic Assistance, established in 1949 by Russia, Poland, Czechoslovakia, Hungary, Bulgaria, Rumania, Yugoslavia and Albania).

An article by Norman MacKenzie in the New Statesman last month maintains that these countries have been unable to achieve the degree of common planning already attained by the six European countries in the Common Market—hence Krushchev’s apparent anxiety lest Britain’s entry into the Common Market and the further development of the Market may make great difficulties for the exports of the Comecom countries, including Russia. Mr. MacKenzie’s view is that each of the Comecom countries is concentrating on industrial self-sufficiency rather than on integration into the whole group. One outcome has been that “with the exception of Poland, these predominantly rural countries are now chronically short of food.”

One ironical accompaniment of the relationship between Russia and the other Comecom countries related by Mr. MacKenzie is that their internal price systems are so complex that when they enter into trade agreements between themselves they have to make use of world prices as a common basis of measurement, which “explains why the trade attaches of communist embassies in the West spend so much time collecting invoices and catalogues which are sent to Moscow for analysis.”

The mailed fist

It is the fashion these days for managing directors, Ministry of Labour officials and politicians to congratulate themselves and everyone else on the harmony and amity that is supposed to mark industrial relationships. To the extent that things have changed it is mostly the result of years of low unemployment and shortage of labour—employers have had to hide the mailed fist a little. But Mr. Peregrine Worsthorne, of the Sunday Telegraph, recently scented a wind of change. He noted that the Wall Street Stock Exchange collapse alarmed the workers at the Ford Motor Works at Dagenham with whom Mr. Worsthorne had been talking.

This is what he had to say about it:

“The men I talked to were frightened and malleable, as if they had been suddenly awakened from a deep sleep, and scarcely knew where they were. If the mood at Ford’s is any guide, now would seem to be the time to put industrial relations on a sounder footing. At the risk of being called all sorts of unpleasant names, I should like to suggest that this means, in blunt terms, putting the working man in his place, which is a very much lower one than he has been encouraged to enjoy for 15 years.”

Don’t say you haven’t been warned!

Going up or down?

On the whole economists and politicians claiming to understand the workings of the economic system have lived in a mood of sustained optimism for the past twenty years, based on the sanguine belief that things would never get really bad again because there is more knowledge and experience available than there used to be. Bernard Harris, writing recently in the Sunday Express, on prospects of a slump in America like that in the ‘thirties, dismissed it, not precisely because there aren’t danger signals, but because “the cause of business fluctuations is better understood. The techniques for dealing with them are better developed.”

But there are dissident voices. Mr. Enoch Powell, who has been “saving the country” by resisting the nurses’ demand for higher pay, went on record two years ago to the effect that the Government’s techniques for handling the crisis of 1958-9 had had no effect whatever. (As he had resigned from the Government he was exercising the right to be critical of what his ex-colleagues were doing). And Mr. George Schwartz has been wondering in the Sunday Times whether we aren’t “back to the old trade cycle” (Powell’s view appears to be that we never left it.)

Mr. Samuel Brittan in the Observer goes further than Powell, who thought the Government’s actions had no effect, because he (Brittan), thinks they make the problem worse:

“Government financial measures have in recent years actually accentuated the trade fluctuations that they were supposed to control.”

The Financial Times (June 15) pointed out another difficulty about prescribing cures for whatever ails the patient, namely, the difficulty of diagnosis. How do you prescribe for an unhealthy state of trade if you can’t decide what is its state?

“At present British industry is operating on a plateau, and one can make out an almost equally convincing case for saying that the plateau is sloping downwards as upwards.”

East-west trade

For many years after the war, and particularly when the Western governments rigidly prohibited the export to Russia and her allies of products and materials useful for armaments, never a trade union conference went by without resolutions being moved demanding more trade with Iron Curtain countries. Many workers who were enthusiastic about it had a somewhat mixed idea of what it meant: to them “more trade” meant more British goods being sold abroad without its counterpart of more foreign goods being marketed here. (Some supporters of joining the Common Market have the same blurred vision.)

In the last year or two, with more exports from Russia and Eastern Europe coming into world markets, zeal for East-West trade has cooled off considerably. British coal miners who had supported the idea had never anticipated that it might take the form of the large quantities of cheap Russian oil hastening still further the decline of coal as a fuel for manufacture and domestic lighting and heating. And workers in engineering concerns doing big business in exports were not counting on the steady increase in the amount of machinery and equipment that now figures in Russian exports. A recent, development has been the Russian invasion of the watch market. Soviet Weekly (June 28, 1962) tells how Russian exports of watches have increased from 12,000 in 1938, to 250,000 in 1955, 1,147,600 in 1957 and 4½ million in 1961. They go to 50 countries in all parts of the world and “in price and quality Soviet watches are challenging the long-standing pre-eminence of the Swiss watchmakers in this field.”

Edgar Hardcastle

The Confessions of a Tory MP (1962)

From the August 1962 issue of the Socialist Standard

Cyril Osborne, Tory MP for Louth since 1945, often blurts out his thoughts on the state of the country without much regard for the embarrassment it must cause to his Party. He is a stockbroker, a company director, and an executive member of the Association of British Chambers of Commerce; he has a special interest in trade and finance.

He is gloomy about the present, and pessimistic about what comes after. Speaking to the staff conference of the Wholesale Textile Association at Oxford on July 9 he struck out in all directions; with force if not always with accuracy, if we judge by the report in the Times: “The Western capitalist system,” he said, is facing its gravest crisis since 1931, and “the communist powers” are not in better shape.

He found that in most countries excess manufacturing capacity has been built up in many basic industries, and “no one seemed to know how to increase consumption without starting galloping inflation”:

“They were all trying to export more and at the same time cut down on imports. President Kennedy was beaten by the problem and Germany’s exuberance was slowing down. The whole Common Market is losing its value, while Canada is down and out. Neither Government nor Opposition in this country is sure what is the right answer.”

Discounting some exaggeration, Mr. Osborne’s description of trade conditions in the Western world is indisputable. There are an increasing number of firms and industries here and across the Atlantic that are working far below capacity; not because they could not expand output by getting more workers out of the hundreds of thousands of job-seekers, but because they can’t find enough buyers who will offer profitable prices for their products. In some big industries, coal and railways, shipbuilding and aircraft production, the number of jobs is falling as sales decline.

It is a telling point Mr. Osborne makes that the countries are all trying to increase exports while curtailing imports, forgetting that one country’s exports are another country’s imports. (Mr. Osborne probably does not know that Socialists were making the point before he was born). And Mr. Osborne is at least getting a little nearer to the truth when he doubts whether the remedy is to be found in the Common Market, or in Kennedy’s policies, or in Canadian dreams of greatness, or in the way they run their trade in Russia. According to him, “the communist powers” are anxiously watching to see if we can find the key to the problem.

But first a word or two about Mr. Osborne’s personal and Party responsibility. He tells us now that the workers (and “the management”) have got to work harder and expect less, and put up with the loss of jobs that will follow the bankruptcy of many inefficient firms and that even so it is uncertain whether recovery can come “without the cruel harshness of an economic slump”: in other words, back to the nineteen thirties and the depression years.

He finds the root of the trouble in the outlook of this generation, “that has been told it can vote itself anything it desires.” But who told them that if they voted a Conservative Government back into power it meant voting to double the standard of living in this generation, and meant “Prosperity and Peace,” and “prosperity and opportunity for all”? Who told the electors in 1959 that 1951, when the Tories came into power, “was a turning point in British history”? Turning away from what to what? Surely it wasn’t supposed to mean turning to the grim outlook Mr. Osborne now threatens us with?

And it is transparently clear that Mr. Osborne knows no better than those he slates how to put things right. He wants the workers to work harder and expect less so that prices will be lower and British goods improved in quality. But just as it is impossible for all the world’s exports to expand if all the worlds’ imports are being cut—which Mr. Osborne sees—it is likewise impossible to make trading conditions better by having each worker producing more and buying less.

And while British industries are lowering prices and raising quality and producing more, what are the rest of the world’s manufacturers supposed to be doing? They will all be chasing the same elusive solution.

But note just how silly Mr. Osborne’s solution is. The problem, as stated by him, is “how to increase consumption” since many industries have excess capacity which will not be used unless consumption is increased—and his remedy is that consumption should be decreased (The workers must “expect less.”)

We have to correct one of Mr. Osborne’s errors, his belief that no one seems to know how to increase consumption without starting inflation. Socialists know very well how to do this and have been trying to get workers to heed it for a long, long time. All it needs is to bring the production and the consumption together. The world’s population needs, and would like, to increase its consumption of all kinds of things by very large amounts. The world’s resources of human labour, nature given materials, and machinery, etc., could vastly increase output of the things people want. Let Mr. Osborne tell us why the two should not be brought into direct relationship, with production solely for use without the complexities of buying, selling and profit-making that the Western and Eastern powers agree in supposing to be necessary.

Edgar Hardcastle

News in Review: Algeria (1962)

The News in Review column from the January 1962 issue of the Socialist Standard

Algeria

In Algeria and in France the blood still flows.

The shootings, the bombings, the threats—even the publicity-worthy attempt, by the OAS to extort money from Brigitte Bardot—are typical of a bitter struggle between nationalists and colonialists.

Recent events have been bad enough. But according to some correspondents they are only the lull before another terrible storm breaks over Algeria.

What has happened to de Gaulle, the strong man who was going to clear up this mess? Whatever local influence the French President has had on the struggle—and there is no denying that he has had some—he is pretty well powerless to resolve the basic dispute.

The Moslems are still adamantly for an Algerian Algeria. The settlers stand firm for French control of the country.

Post-war history has been notable for its bloody nationalist struggles as the colonial powers have been pushed out of country after country, not always going without a fight.

This is what can be expected when capitalism throws up its disputes over property and the right to exploit a country’s workers.

That is basically what the trouble in Algeria is about. Within capitalism such struggles must go on.

Weak politicians can certainly do nothing about this. Strong politicians may make a show of doing something but end up no better than the rest.

Pay Pause

There was, of course, much moaning in the House when they got the news that the pay pause had been defied by the award to the electricity workers.

No moaning in the power stations, though. The workers were bound to resist the pause, because it is a threat to their living standards. That is what drove the teachers to demonstrate and what may cause the civil servants to start working to rule.

For the workers, then, it is simply a matter of fighting for their interests.

And for the employers?

For some of them the pay pause was a welcome thing. But for others it was not so simple.

Some weeks before the electricity award many private employers in the road haulage industry had chosen to ignore the Minister of Labour’s ruling that a pay increase and a cut in hours could not operate until the first of this month. The employees of these firms got their rise and reduction in hours in the middle of last November.

Why did the road haulage firms give in? Simply, they reckoned up the cost of surrender. Then they balanced it against the cost of the strikes and other protests which would follow a postponement of the rise. They found that capitulation was the cheaper course. So they paid up.

Which goes to show how capitalism’s divided interests extend to the employers themselves and often defeat the capitalists’ own ends.

Scooter Slump

One by one, the never-had-it-so-good industries are feeling the unaccustomed draught of recession.

Cars, television sets and refrigerators have already had their slumps. Now a side-show industry in the post war consumer goods boom has taken a fall.

Scooters and mopeds took their share of the boom, winning a lot of young people away from the bicycles they used to pedal around. Like the rest, they had their glorious summer in 1958 when the H.P. controls were off and everything sold like hot cakes.

This was the time when Raleigh Industries, already famous for their pedal cycles came in to try to take their share of the scooter and moped market.

Since then times have become hard. Lambretta recently had to cut their prices drastically in answer to their competitors’ reductions. Now Raleigh, who have already suffered in the slump in bicycle’ sales have announced that in March they will close their factory at Smethwick which turns out their scooters and mopeds. Fifteen hundred people will probably lose their jobs.

Perhaps this only amounts to a recession from which the stricken industries will soon recover. But there are enough of them in trouble now to cause fear that it is more serious than that.

Capitalism is still a system of ups and downs. Its spells of relative prosperity cannot have any permanent value. Workers should not wait until they are on the dole queue before they learn the truth of this.

Lib-Lab?

It is early days yet for the Labour Party seriously to consider an alliance with the Liberals. Mr. Gaitskell still has enough hope of becoming Prime Minister in his own right to explain his description of Mr. Woodrow Wyatt’s suggestion of a Lib.-Lab. link-up as “silly.”

It is safe to assume, though, that the suggestion finds rather more favour among the Labour Party members who arc getting sick of being on the losing side. If the Tories give them one or two more drubbings at the polls, anything could happen.

Nothing new in this, of course. The Labour governments of 1924 and 1929 blamed their alliance with the Liberals for their failure to run capitalism. They swore that they would never again allow their hands to be so tied.

But having the 1945 government to themselves made no difference—the Labour Party failed again. The best that some of them can now suggest is to revive the idea of a Liberal alliance— which they themselves told us was discredited by the events of 1924 and 1929.

There is nothing surprising in this. The Labour Party do not exist to propound political principles. Like any other capitalist party, they are out first of all for power.

This goes for the Liberals as well. They have made it plain that they would only consider an alliance which was worth their while in terms of Members of Parliament.

All good, clean, cynical fun this. May we be excused if we do not see anything to laugh at?

Finance & Industry: Our educated politicians (1961)

The Finance and Industry column from the February 1961 issue of the Socialist Standard

Our educated politicians

In an interview published in the Observer (8.1.61) the banker Lord Brand, asked if he thought that academic economists do more good than harm, replied that they are extremely valuable. He claimed that through the studies of Keynes and other economists knowledge has grown and this “has altered the whole picture of economic life”. Possibly because Lord Brand would hesitate to claim that economic life has altered particularly (“I do not think we have an easy time ahead of us in the next year or so”) he went on to blame the politicians for not accepting the good advice of the economists.

He recalled the reparations chaos after the first world war, when the politicians (backed however by 3 out of their 7 banking economic advisers) insisted on exacting impossible reparations from Germany. Lord Brand says: “It was clearly mad at the time to those who would, and could, see, and were prepared to act accordingly. But the people who had control of policy could not see”.

He singles out Lloyd George—”Like most statesmen of the day, he knew little or nothing of finance”—yet Lloyd George had been Chancellor of the Exchequer. But it appears, according to Lord Brand, that Lloyd George insisted on the mad policy because he had boasted of squeezing Germany “till the pip squeaked” and dared not back down for fear of losing political support among voters as blind as he was.

But in the second world war the statesmen appear not to have changed much. Lord Brand tells how Churchill and Roosevelt, on the advice of Morganthau, Secretary of the U.S. Treasury and with the agreement of Lord Cherwell (a “highly intelligent” man) adopted a plan to reduce Germany to a purely agricultural country. Lord Cherwell’s defence of his action was that the British Government wanted a loan from America and acceptance of this fantastic plan would make it easier to get the loan.

Capitalism 1961

Lord Brand’s complacency about the altered picture of economic life reads oddly in face of the motor car slump and the looming difficulties facing international trade and currencies. The years between the wars were spent creating currency collapse in one country after another and then laboriously re-establishing stable currencies. After World War II it was all supposed to be different but now Professor Meade is warning of the drastic remedies that he thinks may be necessary because of America’s loss of gold, so he proposes that the dollar and the pound should be cut adrift from their existing link with gold.

The Guardian in an editorial (3.1.61) remarks “Undoubtedly a period of chaos would follow. Professor Meade feels sure that stability would return at a new level of exchange rates within six months. Perhaps so; but in the process the structure of the International Monetary Fund, one of the greatest achievements of international collaboration in our generation would have been laid in ruins “.

One prospect seen by the Guardian is that “soon the Russian rouble might be the only major currency with a fixed gold parity “.

This seems ironical to the Guardian but only because they persist against all evidence in believing that Russia is not a great capitalist power, but something else.

Flood Havoc in China

Through floods and storms China is threatened with what may be a catastrophic fall of food supplies. In a Socialist world such an event would be met by movement of supplies from elsewhere. But under capitalism a different set of values rules. America, Canada and other countries have masses of food they cannot sell profitably. The Times (20.12.60) reported that in the four chief exporting countries America, Canada, Argentina and Australia, “the end-of-season carry-over on July 31 next are expected to reach the unprecedented total of 60,400,000 tons, a rise of 7,500,000 tons on the year”.

So what problem can there be? But capitalist trade and rivalries create problems. The American government when it wanted to give wheat away or sell it cheaply met opposition from the other exporting countries, who feared this would reduce world prices and cut into their own sales. Secondly there are those who on political grounds would object to help being given to China, and according to Mr. Cyril Osborne, M.P., who was recently in Peking, there are politicians in that country who reply that the Chinese people “would rather starve than eat American food or accept American charity”. (Daily Telegraph, 3.1.61). (The starving might give a different answer).

According to Reynolds News (1.1.61) projected Canadian sales of their surplus to China are likely to meet with objections from the American government.

In the meantime the American food stocks are being nibbled at by the recently increased numbers of unemployed :

“In September 3,200,000 Americans were given food from the surplus supplies held by the government”. (Guardian 2.1.61).

Speculating in Misery

Under the heading “It’s an ill Wind” the Financial Times (9.1.61) had the following:

“Americans, by their law, may not trade with Communist China. But no law stops them speculating on the effects of China’s misfortunes, and for the past week they have been rushing to do just that. Scene of their operations is the Chicago soybean (spelt this way in America) market, biggest commodity futures market in the world.

The present bout of speculation in soya-beans and their products began three months ago, as reports of crop disaster began to seep through from China, only big soya-bean producer apart from America itself. People in the trade saw then that if the usual Chinese exports did not reach Europe, American beans and oil would have to go instead. So they put their money on a rise in the market.”

Edgar Hardcastle

Finance & Industry: If only prices would come down! (1961)

The Finance and Industry Column from the January 1961 issue of the Socialist Standard

If only prices would come down! 

A woman reader of the Evening News (28/11/60) wrote referring to the old saying that what goes up must come down, and asked if this applies to the cost of living; “if so I haven’t noticed it”.

About 99 per cent. of the population would say, if asked, that they “want prices to come down”. They don’t really mean this. What they mean is that it would be very nice if the prices of the things they buy went down and the price of the thing they sell went up. The worker would like to sell his mental and physical energies to his employer at a higher price (a higher wage) and at the same time get more for each pound he spends, through lower prices in the shop. And manufacturers who sell industrial products would like to see those prices go up and all other prices (including wages) go down.

One exception to this general attitude is the common practice of trade unions of associating themselves with their employers in approving higher prices. Thus the railway unions approve higher fares and the coal miners higher prices for coal.

But coming back to the question in the Evening News, would workers be better off if prices were lower? France a few months ago and Russia this month gave one kind of answer to the question, the answer being that it did not make any difference. What happened was that France cut the face value of her currency by 100, and the Russians cut their rouble by 10. At the same time all prices, wages, fares, etc., were cut in the same proportion, so everyone was in just the same position as before.

But on some occasions prices have not been reduced by this kind of government action but have fallen under the influence of trading conditions. Did the workers gain then?

It happened in 1920-1922. Between November 1920 and December 1922 prices fell on average of 35 per cent.; like being able to buy for 13/- some article which had cost 20/-.

But in the same period wage rates fell on average by the same percentage (or perhaps a little more). So the worker who could buy articles at lower prices had fewer shillings in his wage packet to buy the articles with.

It was a time when unemployment was heavy and conditions were particularly unfavourable for trade union resistance to wage cuts.

New Russian Rouble

The declaration of the Russian government that as from 1 January 1961 the official rate of exchange of the rouble will be 2.52 to the £ which will make it of higher value than the dollar and equal to about 8/-, will not mean much in practice since (unlike the dollar) it is not tied to gold and is not freely convertible into pounds or dollars. Commentators in the newspapers mostly take the line that the aim of the Russian government is prestige, the satisfaction of having at least a nominal exchange rate greater than that of the dollar. In addition however there is already the long term purpose of making the rouble eventually a gold backed world currency acceptable in inter-national trade as the pound and dollar have been.

The Daily Worker (17/11/60) anticipates that “the new exchange rates and the change in the gold content of the rouble herald the opening up of peaceful competition between the rouble and the dollar”, and “It may not be long before the rouble begins to challenge the dollar for primacy in world trade”.

There was a time when even the Daily Worker would have recognised that the trade war between capitalist states is anything but “peaceful competition “.

Rouble Millionaires

The Daily Telegraph (6/12/60) tells of a Russian woman who got into the ranks of the rouble millionaires by a piece of private enterprise that landed her in jail for three years. She ran an organisation, complete with a lawyer as secretary, a “scientific consultant”, an accountant, and a network of agents selling cure-all herbs at 45/- a packet. When arrested she had 700,000 roubles (worth about £60,000 at the old rate of exchange) and had just bought a country house for 300,000 roubles. “Her daily earnings would sometimes amount to 5,000 roubles, or eight times a worker’s monthly wage”.

The Economic Horizon

A year ago most of the political and economic forecasters were happy about the boom time ahead and still confident that if anything went wrong the government could fairly easily take the steps that would put the economy back on expansion. Now they are not so sure. The fact that they are all asking the question is itself a pointer to growing uneasiness, made greater by the foreseeable but generally not foreseen collapse of motor exports.

Now it is accepted that America and Canada are likely to have unemployment greater than in any year since the end of the war and there is the natural fear that British export trade may fall further and the jobless increase in number.

Gone is the post-war optimism based on the belief that they could always dip into the Keynesian remedies and keep everything under control. One of the current activities is the setting up of export councils to boost the sale of British goods in overseas markets, including the Export Council for Europe set up by the Federation of British Industries and manned by “some of the most prominent men in British industry and commerce ” (Financial Times, 11/11/60).

But before anyone accepts that the export problems of British capitalism can readily be solved by pushing into other markets (and thereby crowding out some other would-be sellers) it has to be remembered that other sections of the capitalist class would have had the same idea. Canada has appointed a “super salesman” to head its export drive, in the person of a new Minister of Trade and Commerce, and the American government is trying to boost their exports. Sweden, too, is aiming to solve its problems by more exports, and their eyes are fixed on the market for their goods in Britain. And to add to the troubles of all of them Russian exports are finding their way into many of the world’s competitive markets.

Paul Bareau, the new economic editor of the Daily Mail (25/11/60) argues that the present troubles in this country are due to “the excessive optimism and rashness of the years 1958 and 1959. Restrictions on hire purchase should never have been completely removed. This freedom was abused and we are now paying the price”.

So you take your choice between those who say that there is no need to worry because the government can always take action to put things right, and those who say, like Mr. Bareau, that the government did take steps but they were the wrong ones and had the effect of making things worse.

However, Mr. Bareau is cautiously hopeful. “The coming year will provide plenty of problems; but they will not be the problems of a great slump”.

Edgar Hardcastle

So They Say: New Book — Old Story (1976)

The So They Say Column from the September 1976 issue of the Socialist Standard

New Book — Old Story

In an interview published by the Times on 2nd August, Sir Harold Wilson let it be known that he has completed the first draft of a book called The Government of Britain. Apparently the work has much to commend it. “Every sentence was an intellectual challenge to try to remember things which will be useful as a kind of text-book, which in the past have been mainly written by academics from outside.” Such a description suggests a semi-autobiographical account of the attempts to administer capitalism over recent decades, and as such it can only be a commentary on the various acts of expediency employed in order to paper over the basic contradictions. Acts of expediency in our description, governments choose to call them “policies.”

Even Wilson appears to acknowledge that the “Governance” in his title is only alleged when he remarks “In the compulsions of taking decisions, of course, you cannot forecast whether this decision will come off.” Of course. Capitalism is a system of society in which there is no social control over the means of wealth production and distribution. The owners, a non-working minority, allow production to take place only when there is a likelihood of a profit. Wilson and the Labour Party have preferred to tinker with the effects of such a system and shy clear of the revolutionary solution — hence the never-ending “compulsions” they have been faced with. The frequency of the calls upon Wilson’s juggling ability meant that among other things his reading suffered.

I have never even read Marx, couldn’t get past the second page because of that whacking great footnote which bores me every time I ever try to read it. Although I think I have a vague idea of what he was after in his concept, it is not what I understand by British socialism.

Were Marx alive, we feel sure he would concur with the conclusion.

The Devil You Know

George Bernard Shaw wrote somewhat sarcastically that “the reasonable man adapts himself to the world.” Recently those most reasonable of men, the Labour Party Tribune Group, have been giving an excellent display of their adaptability. The Conservatives tabled a motion in Parliament for the Chancellor of the Exchequer’s salary (£15,000) to be halved. This amounted, in the words of the Times report of 2nd August, to “a criticism of the public expenditure cuts announced on July 22nd, and a condemnation of the Government’s economic and financial policies in general.” Amid the hot air and other gaseous emissions in that Palace, Tribune group members have been loud in their criticism of the cuts. Consequently the possibility of their abstention from the vote with a resultant government defeat was raised. The time for these men of principle had come.

However, adaptability prevailed. First they issued what we have come to expect from Tribune Group MPs — “a token protest.” The “left” pulls no punches, their amendment called for a reduction in Healey’s salary of £5.00 per annum. Next Mr. Norman Atkinson, one of their leading if somewhat dim lights, explained why his group should not risk a government defeat.

The Government have made it clear that they support the central banks about the use of international credits . . . It seems logical therefore, that all those who seek to sustain the Government in office must accept the bankers' cuts in principle, not in their entirety, but in principle. The only alternative was to force the Government to go to the country for a general election. But such action would make little sense . . . because if Labour won it would be taken as an endorsement of the bankers’ policies and it would mute the left for a long time to come.

This, we understand, is known as keeping all the options open. The Tribune Group wish to preserve the Labour Government because they prefer to mouth disagreement from the government benches. In this way their posturing attracts more attention than it otherwise would. Mr. Atkinson was simply overflowing with sweet reason and “left-wing” principle:

Only the 2 per cent levy on employers through national insurance contributions will attract combined opposition from the Tories, the nationalists and the Liberals, he said. Because the measure must mean at least 50,000 sackings in addition to those already announced, the left must face the sacrifice of jobs to keep the Government in office. We have no alternative, and neither has the Trades Union Congress in four week’s time, that is the brutal reality.

Facing reality must necessarily strike the Tribune Group as brutal, they are more used to dealing in hypocrisy.

Con on Class

While giving a public pep-talk to fellow conservatives in the columns of the Daily Telegraph, Sir Geoffrey Howe MP indicated that times are a-changing. He argued that changes had to be made to the Conservative Party image if the electorate was to be persuaded that the party did not stand “only for bosses, rich people, upper classes.” Unless the common man discarded such misapprehensions, Howe ominously concludes, “This could bode ill for the future.” Apparently he has been inspired to speak out following numerous reports that the typical response to Conservative canvassers has been “We re all Labour voters in this house. We’ve got to be haven’t we? We’re a working class family you see.” We do not deal with this ill-founded statement here, but note the politician’s attitude to it.

It makes it difficult to argue that class is not a significant factor in British politics.

Daily Telegraph, 2nd August ’76

Which is extremely tiresome for politicians no doubt. A class-divided society necessarily produces such handicaps for them. However, Mr. Howe, who thinks that there are several classes rather than two, is ready to throw one of them overboard in his search for conservative voters.

The son of a successful entrepreneur — even the grand daughter of a Prime Minister — is bound to acquire knowledge and experience that will confer advantage in the next generation. But let us certainly reject the suggestion that we favour the concept of a ruling class or anything like it.

But wait, he would only reject the suggestion that they favour the concept. The ruling class, no doubt rattled, can breathe again.

Will He, Wont He?

A glittering exchange took place between Mrs. Thatcher and the Prime Minister shortly before the parliamentary recess. The Conservative leader asked what the Prime Minister expected to be the maximum number of people unemployed in 1976. Mr. Callaghan replied:

The Chancellor has said he expects unemployment to begin to go down by the end of the year. I cannot improve on that forecast. I have come without the figures in any case.

Times, 6th August ’76

After other remarks, Mrs. Thatcher rose again.

The Chancellor did not give any figures. He refused to give figures when cross-examined by both sides of the House. I would have thought that the Prime Minister would automatically have informed himself about one of the main figures, which is the maximum unemployment expected during the next year. Is he saying he has not?

With considerable politeness, Mr. Callaghan informed the enquirer “Yes, I am saying that because I find these forecasts often cancel out . . .” He also had some advice for her.

I would beg her not to take too much notice of forecasts. So many of them often proved wrong over the last six months . . .

The performance and the show (the longest-running in the west and) will continue after the interval.

From Bad to Bad

However there is a time and place for everything, and Mr. Callaghan is not adverse to making forecasts when it suits him. In October 1975 he informed us that over the (then) oncoming year “British families will suffer a sharp drop in their living standards.” His description was “a temporary sacrifice.” We ventured to suggest then that the “temporary” label might be forgotten and apparently it has.

I think industry can say the conditions are present to enable us to have a reasonable bet on the prospects of viable expansion that will continue. I don’t want to boom and bust. The real traumatic period for this country is between now and 1980 and this is the period we’ve got to concentrate on.

Daily Telegraph, 9th August ’76

Members of the working class take note, the traumas will be yours. Unless you are prepared to study Socialist ideas and work for the abolition of the private property system, the only “reasonable bet” to be had here is that shortly before the end of 1980, Mr. Callaghan or his equivalent (we include conservatives) will be telling us that the forecasts had been wrong; the real traumatic period was to be extended until the mid-1980s. In the meantime working-class poverty will continue.

Alan D'Arcy

Chrysler and the Cabinet: How the Deal was Done (1976)

Pamphlet Review from the September 1976 issue of the Socialist Standard 

Chrysler and the Cabinet: How the Deal was Done. Granada Television, 35p.

This is the transcript of a TV programme shown on 9th February 1976, in which the Cabinet discussions of the Chrysler UK motor company were simulated. The parts of Wilson, Healey, other Ministers and the Chrysler officials were played by political and financial journalists, and the programme was generally thought to have come close to the reality.

The Chrysler Corporation of USA proposed closing down its British subsidiary which had made losses in six of the last nine years, amounting to £60 millions, and was expected to lose another £40 millions in the next year. The Government’s concern was with the unemployment — 25,000 jobs or more — which would be created by the close-down. However, the Government’s newly agreed “industrial strategy” prohibited financing obviously unprofitable companies; at the outset of these discussions the only voice in favour of giving help is that of the Secretary of State for Scotland, where Chrysler is a major employer.

A report from the Central Policy Review Staff (the “Think Tank”) had said the British car industry had already 25 per cent, over-capacity. From the viewpoint of the British Leyland company, which the Government had recently bought for £1,300 millions, Chrysler was an undesired rival; nor, for the same commercial reasons, was there any case for merging Chrysler with Leyland. The loss of jobs was agreed to be a regrettable necessity, summed up thus by Healey’s impersonator: “There’s nothing socialist about preserving existing jobs for their own sake.”

The conclusion was foregone — and yet the Government did undertake to support Chrysler, to the extent of about £145 millions. Why, with everything apparently against it? First, political fear of losing votes, in Scotland particularly. Second, the existence of a Chrysler contract to export to Iran (Healey: “Persia is becoming an increasingly important trading partner with us and the Shah is a touchy fellow.”).

The third reason was not stated explicitly in the TV programme but emerges implicitly from it. This is the inability of governments to manage capitalism even on its own terms. The sapient Ministers talked of “the long term” and “the future”, meaning “if we can keep out of trouble this afternoon perhaps tomorrow’s mail will bring an unforeseen lucky break”. While the discussions with Chrysler went on, attempts were made (fruitlessly) to attract Japanese car manufacturers to Scotland. If unemployment was prevented by the Chrysler deal, how will its transfer to other companies be prevented? What sort of “strategy” is firmly agreed, then has to be abandoned at the first engagement?

This is an interesting booklet, more relevant to what goes on in capitalism than some expensive volumes of retired Ministers’ memoirs.

50 Years Ago: The Crisis: Capitalism’s stranglehold (2025)

The 50 Years Ago column from the August 2025 issue of the Socialist Standard

Is it really possible for government ministers not to understand how capitalism operates? And to be unaware of the inevitable consequences of their own policies? Indeed it is possible. During the nineteenth century, although capitalism regularly went through the recurring cycle of expansion, boom, crisis and depression outlined by Marx as the economic law of the system, governments, capitalists and many economists were forever expecting booms to be permanent and being amazed as each crisis blew up. There are plenty of similar examples in our own times.

Any serious student of capitalism knows that the capitalist is in business to make a profit and therefore will not invest more to expand production at those times when there is no prospect of selling the product profitably. Yet in the last recession, in 1971-2, Heath and Barber complained bitterly that though for months on end they pleaded and threatened and offered inducements for increased investment, “nobody would listen”. Healey, Chancellor of the Exchequer in the present government, confesses to having been equally ignorant of the facts of economic life. “One thing I have learnt from my experience in the past seven months [as Chancellor]: there is no chance of investment if business expects a general and prolonged recession, however generous the tax incentives” (Report of speech, The Times, 5th October 1974).

Later in the same month he was again airing his ignorance, this time as guest speaker at the Lord Mayor’s banquet for bankers and merchants of the City of London:

“I simply cannot understand how it can make economic sense . . . to keep a million active men and women idle when the nation needs the goods they could produce“ (Times, 18th October 1974).

Since when has capitalism been interested in meeting people’s needs? And, in a depression, who needs additional production of unsaleable cars, motor-cycles, supertankers, steel and so on?

[From The Crisis: Capitalism’s Stranglehold on the Labour Government by Edgar Hardcastle, Socialist Standard, August 1974]

Chapter Three: Unemployment or Employment— Reject Both (1984)

From Samuel Leight's book, The Futility of Reformism

We oppose the existence of private property relationships which force those without ownership rights in the means of production and distribution to “seek employment.” This, to be sure, is a revolutionary concept for it is an approach that leads to the very core of an understanding of the case for common ownership. In essence, the problem arises from the poverty of the working class which is inseparable from the wages system. If we were living in a society which conveyed to all its members common ownership rights of all the means for producing and distributing wealth then, as and when we made our individual contributions to the process of wealth production, we would, from an economic and social standpoint, be working for ourselves and not for an employer.

From this viewpoint, it can be discerned that the socialist regards employment under capitalism as an inescapable and degrading condition for the working class, one that reformism is incapable of curing. We refuse at all times to politically support a system of society that, because of the ownership rights belonging to a class, forces the majority to seek their survival and livelihood by employment from the owning minority. Those with proprietorship, whether it be an individual, corporation or state, possess the monopoly and legal right entitling them to employ. This compels the rest to be employed, or as circumstances dictate, to be unemployed. 

It is significant to observe that unemployment becomes a focal point whilst “employment” is accepted as a way of life, seemingly destined to remain with us forever. Unemployment appears as the persistent challenge awaiting an eventual solution, notwithstanding that the class struggle embraces both conditions. Statistics verify that the problem of unemployment is an insoluble one as long as capitalism remains. The “experts” and “the economists,” true to character, disagree as to exact causes and applicable remedies. However, they are all apparently in complete unison in their approach to the existing system. This sacred cow is never accused or pin-pointed as the cause of the quandary. Such an attitude, of course, would pre-suppose the possession and acceptance of socialist knowledge coupled with a disregard for the security of their jobs should they ever publicize the correct scientific approach.

Capitalism operates as a gigantic worldwide market place in which commodities are produced primarily for sale and profit. Should the market place fail to absorb the commodities produced, unemployment, either on a comparative large or small scale, occurs. In addition, the actual employment of members of the working class depends upon the wishes and economic requirements of the capitalist class. For example, increased productivity resulting through the utilization of labor-saving machinery, with the consequent displacement of workers, could create unemployment to a limited degree. These various factors give rise to a standing army of unemployed, whose numbers from time to time may vary dramatically, but its existence is assured as long as the system remains.

In August, 1982 unemployment in Great Britain reached 3,292,702 or 13.8 per cent of the work force, its highest level since comprehensive records began in 1948, topping the 2,979,000 registered unemployed at the height of the Great Depression in January, 1933. True, this figure represented 19 per cent of a smaller work force but when you transfer the numbers to actual human beings, pitifully trying to survive, what difference does it make?

Unemployment in the U.S.A. reached nearly 12 million in November, 1982. These figures only disclose part of the situation. They do not take into account large numbers of demoralized workers who have stopped looking for jobs and others who are working part-time. Far higher percentages of unemployment are to be found amongst various sections of workers such as teenagers, black and Hispanic minorities, and those in heavily industrialized areas that have been hardest hit, such as the automobile and steel factories. A CBS news broadcast on October 10, 1982, contained a report from the AFL-CIO which claimed that there were 14.5 million actually unemployed who were looking for full-time jobs. In April, 1982 black unemployment in the U.S.A. climbed to 18.4 per cent, teen-age unemployment rose to 23 per cent and the unemployed in Detroit was 15 per cent.

The prestigious Wall Street Journal in an editorial on May 11, 1982 suggests the following:

“The answer to the unemployed problem is simple and obvious, but it is being resisted by Congress because of political fears that are only a little short of craven. The answer is to shift the nation’s priorities back toward production, away from non-production . . . All it needs is better leadership in Congress, that is to say removing the people who got us into this trouble and who refuse to admit that their politically convenient ideas were all wrong.”

Unemployment is linked to a market place unable to purchase the commodities already being produced. Therefore, it is surely ridiculous to suggest shifting “the nation’s priorities back toward production,” or in other words producing more for a market already incapable of coping with existing inventories. Industry, of course, does not function altruistically to provide employment for needy workers. The purpose of capitalist production is not to produce goods and services per se but to produce commodities for sale and profit. Unless a market can be reasonably expected production will not be forthcoming. As to the hoary plea for “better leadership,” this is the time-worn favorite peddled by the reformers when they imply that the cause is always with the shortcomings of the individuals or parties running the system but never, the Lord forbid, does the fault lie in the way in which capitalism functions.

Prime Minister Thatcher, in England, has blamed the unemployment rate increases on the recession and the failure by previous governments to tackle Britain’s economic problems. She apparently has not been able to improve matters since her government assumed power—in fact the reverse has happened. President Reagan, in the U.S.A., blames high interest rates, but history will show that when interest rates were comparatively low, unemployment was still with us. And when Canada’s jobless rate rose to a postwar high of 9.6 per cent in April, 1982 the Finance Minister, Allan MacEachen, volunteers some choice trivia:

"The key to world recovery at the present time, for the U.S. and for other countries, is a change in the monetary policy that is being pursued in the U.S.”

President Warren G. Harding in 1921, after listening to conflicting opinions offered by his economic advisers, at least possessed somewhat of an insight and frankness when he confided to a secretary, as reported in the Los Angeles Times, February 20, 1977:

“John, I can’t make a damn thing out of this . . . I listen to one side and they seem right, and then—God! I talk to the other side, and they seem just as right.

“I know somewhere there is a book that will give me the truth, but hell, I couldn’t read the book.

“I know somewhere there is an economist who knows the truth, but I don’t know where to find him and haven’t the sense to know and trust him when I do find him. God! What a job!”

In October, 1982 unemployment in the Netherlands increased to a postwar peak of 13.4 per cent of the work force. West Germany’s jobless was reported in early March, 1983 as having surpassed the 2.5 million mark, climbing to 10.4 per cent of the labor force in February, 1983. Sweden’s unemployment rose to 3.6 per cent of the labor force in February, 1983. Belgian unemployment in March, 1982 stood at 12.2 per cent of the labor force. In December, 1982 unemployment in the 10 European Economic Community countries reached 12.035 million—a post World War II record. In December, 1982, 12.8 per cent of the Canadian work force were unemployed— the highest level since the 1930’s. Japan’s jobless rate for January, 1983 topped 2.7 per cent, a 30-year high. In November, 1982 unemployment in Australia was reported at 8.2 per cent.

It should surely be obvious by now that if a formula existed to cure unemployment, then it would have been discovered long ago. Further, even if there were an absolute solution, it would not serve the interests of the ruling class to implement it. The continued presence of an unemployed segment of the working class enables the employers to exert downward pressure on wage levels, assuring them of surplus workers as and when they are needed.

The U.S. federal job-training program financed by the Labor Department under the Comprehensive Employment and Training Act has already been termed a fraud by avowed supporters of the system. The program assumes that unemployment is caused by persons needing job training and job skills, whereas in actuality there is a shortage of jobs available even for those possessing the necessary skills. In effect, people are being trained for non-existent jobs. 

Reformist approaches towards unemployment have included government subsidization, nationalization, and the Keynesian goal of full employment through appropriate government intervention. All have failed as evidenced by current worldwide unemployment.

Governmental attempts at industrial intervention by means of subsidies are really an artificial process that ignores the prevailing economic climate. They might temporarily keep some workers employed, but this would be at the expense of the capitalist class as a whole since the funds would be provided through taxation. Such schemes tinker with the problem at best, are always short-lived, and can only be used on a very limited scale.

Nationalization in no way guarantees a solution because the same market conditions that create the challenges in private industry, namely selling commodities at a profit, predominate whether the businesses are owned privately or by the state. A graphic example of the desperation of American workers in government or nationalized occupations took place in March, 1982 when it was reported that

100,000 swarmed the post offices in the Miami area during a period of one week, applying for 700 positions that may not be available until 1985.

The U.S.S.R. has state capitalism operated on a national basis under the tyrannical dictatorship of the so-called Communist Party. Employment is controlled without any semblance of democracy, without legitimate trade union activity, and without permitted political opposition. The centralized control allows individual industries to be maintained financially, should the need arise, by support from the budget. However, as a consequence, efficiency in production is impaired and jobs are unnecessarily overstaffed. Denied the protection of unfettered trade unions (they exist in name only as they operate under direct Government control), and with no democracy, “employment” in Russia is wage-slavery at its very worst. Should you be designated a “dissident,” even your slave status could be jeopardized and you might find yourself among the 2 million people currently imprisoned in the Soviet penal system.

The Keynesian doctrines, formulated by J. M. Keynes, supports government action in order to maintain a demand for commodities through its own direct investments in the economy, which would hopefully result in more or less full employment. None of these devices, used and supported by past governments, in particular by both the Labour and Tory parties in England, have prevented recession, depression, inflation and massive unemployment.

It should be borne in mind that any growth in the total number of employed reported at any time is related to the fact that greater numbers of workers in the same family have had to seek employment in order to maintain the standard of living of the household. The numerical glorification that is sometimes touted as an example of more people being employed now than in the past is an attempt at making a virtue of the necessity of survival. Mothers, for example, are forced to leave their infant children in day-care homes in order to go to work and supplement their husband’s pay—this out of dire need and not as a means of “achieving economic freedom” or so-called “equality” with the menfolk. In a study, conducted by the Federal National Mortgage Association by the Louis Harris organization and reported in the Wall Street Journal on September 15, 1982, 91 per cent of those polled said they believe it takes a two income household to afford a mortgage today.

The working environment is geared to a profit motivated society which at all times places the successful production and realization of surplus values in a priority position as compared to human welfare. Physical conditions in a multitude of industries and instances, viewed from certain aspects, have of course improved substantially as capitalism has progressed from the 18th through to the 20th century. But this surface appraisal can be most misleading without further probing and evaluation. Although the socialist supports all trade union activity which results in the improvement of working conditions, our prime concern has never been, nor ever will be, the refinement of capitalism in order for profits to be accrued in more conducive surroundings. Granted, wage levels and working conditions are of paramount importance for the very survival of the vast majority as long as capitalism exists. We nevertheless limit our energies in this regard to trade union support and activity, but politically refuse to become involved in how best to run a system that we want abolished in the shortest possible time.

It should be recognized that plant, retail and office modernizations are not related to the activities of political reformists at all. Rather, they are the result of either trade union pressure to improve working conditions or the desire of the capitalist to remain competitive by providing up-to-date facilities. Within the bounds of certain economic considerations, to the degree that the workers are kept comparatively happy and healthy, so to that extent their exploitation is that much better accomplished. In a world which literally can be described as an armed camp, wherein the majority are economically imprisoned, you will not find us clamoring for more “humane prisons,” but for a society in which prisons are non-existent. Likewise, we will not be found in association with the reformists—they decry the inhumanities of capitalism but never urge for its abolition in order to effectively deal with fundamental causes. The main task therefore confronting the “imprisoned” should be the abolition of the prison and not in diversions which look for improvements in its operation.

In any event, the superficial, physical upgrading of working conditions that have been accomplished are more than offset by the pollution of the environment that capitalist industrialization has created. Its waste products, indiscriminate use of chemicals and materials, radiation and nuclear poisons have all resulted in an enormous detriment to health over the past several decades. Cancer, for example, has enveloped us like a plague. I, for one, do not need any further proof beyond my own common sense and personal experience to realize that there isa relationship of cause and effect between our modern-day pervasive pollution and cancer. Furthermore, the mental health of the population, as evidenced by the inundated clinics, hospitals and sanitariums, and directly caused by the stresses and insecurities of a competitive, anti-social environment, should be taken into consideration when comparisons are made between past and present conditions.

The analysis of the environment should be examined in its entirety. This would take us beyond the factory gates and offices, to be confronted with a world balancing on the precipice of nuclear war. Such an approach, together with a veritable multitude of deplorable working conditions and social circumstances that still prevail, and for that matter will always remain in some form or other under capitalism, should remove all reasons for complacency or satisfaction from the reformists.

In March, 1980 The International Labor Organization reported that more than 55 million children under the age of 15 are being exploited around the globe. They stated, as an example, that match factories in India employ more than 20,000 children, some as young as 5, for a 16-hour work day beginning in some instances at 3 a.m. On a visit to Toledo, Spain several years ago, after being charmingly offered a glass of port by one of the factory managers, we were escorted through the factory where I was horrified to see young children 8/10 years old, working at the benches with detailed and intricate filigree which of course could be ruinous to their eyes at such an early age.

On February 27, 1981 it was reported in the Arizona Daily Star that in the New York City garment industry sweatshops have grown from fewer that 200 to 3,000 in the last decade.

It was reported in the New York Times, February 5, 1982 that according to Dr. Loren Kerr, a leading authority on occupational disease, the deaths of 4,000 coal miners each year can be safely attributed to black lung disease. He is quoted as saying:

“Most coal operators are anxious to increase production, even when it raises dust levels above legally defined limits. Federal inspectors must insist on adequate ventilation and water spraying to control this dust today, or else years down the road, miners will suffer an avalanche of new breathing problems.”

In an article in the Wall Street Journal, June 18, 1981 it was stated that after a Supreme Court ruling on cotton dust it could be expected that the textile industry would be installing new, more efficient equipment that could help eliminate the incidence of brown lung disease. The article further states:

“Even as mills modernize and reduce dust levels, problems concerning brown lung disease remain unresolved. Questions regarding compensation for workers who contracted the disease long before mills began to clean up, how smoking affects susceptibility and what specifically causes the disease are still unanswered.”

In April, 1978 the U.S. Government, through its Health, Education and Welfare Secretary, said that as many as 5.6 million Americans may die of cancer or other diseases as a result of the exposure to asbestos in shipyards and other workplaces since the beginning of World War II. As a sequel to this the Manville Corporation, the nation’s largest producer of the mineral fiber asbestos, filed in August, 1982 for reorganization under Chapter 11 of the Bankruptcy Code. The company had become inundated with thousands of law suits, together with the potential of many more in the future, most of them filed by workers claiming the inhaling of asbestos fibers, which damaged their health and often led to death. The cost of this pending litigation had been estimated at $2 billion or more—hence the reason for the company seeking the protection afforded by the bankruptcy laws.

It is glaringly obvious that through the years the working class have never had disclosed to them the true occupational hazards of their employment. Such disclosures might well have deterred some; it would certainly have given others leverage in wage and environmental negotiations; but, notwithstanding, most no doubt, out of economic necessity, would still have been forced to an exposure resulting in ill-health and untimely death.

Whether employed or otherwise the dark cloud of insecurity will always permeate the lives of those living in a class society. No reform can ever properly convey the precious attribute of security to those dependent on their masters, within a capricious, anarchical system impersonal to human values. When the working class finally awaken to their true position of servitude as employees, with socialism on the horizon, it is more than likely that the international atmosphere will be resounding with cries of “take this job and shove it!” And such crudity may well be forgiven in view of the historic and belated justification.

Recession in the United States and Canada (1958)

From the June 1958 issue of the Socialist Standard

The United States is at present in the throes of the worst period of industrial stagnation it has experienced since the 1930s. And Canada, as number one U.S. satellite, with an economy closely interwoven with that of the U.S., fares no better. The seriousness of the situation may be indicated by the figures for unemployment, which in March reached 5,198,000 in the U.S., and 590,000 in Canada.

Political, business and other leaders in both countries respond to the condition m the same shallow manner.

When the existence of the “recession” was officially recognised some months ago, U.S. President Eisenhower proposed to deal with it by substantial tax reductions, which, he said, would increase purchasing power deplete, surpluses and start the wheels of industry turning again. Mr. Pearson, Canada’s Liberal leader, also advanced this thought in the last election campaign. The proposal has not yet been put into operation, perhaps because Mr. Eisenhower forgot about it and Mr. Pearson failed to become Prime Minister.

At present Mr. Eisenhower is lending his support to “operation optimism." Lack of confidence is now blamed for the recession and this confidence must be restored. People must in some way be encouraged to buy goods, even to the point of extravagance, they must, in Mr. Eisenhower’s words, be urged to “buy anything.”

Following this line of reasoning, U.S. capitalists are doing their best to propagandise themselves back to prosperity. The Advertising Council, a top advertising group, has started a four-month “confidence in a growing America” campaign, intended to improve the “economic attitudes” of consumers. Auto dealers in 110 cities have started sales drives featuring the slogan, “You Auto Buy Now.” It is expected that this campaign will spread to 200 more cities. Cleveland has started a “Buy Now” campaign, with a “V for Values” theme and a “Miss Prosperity.” Boston is planning a POPS (“Power of Positive Selling ”) drive to “combat loose recession talk.” In New York a “National Sales Crusade” is being launched. Some business men are wearing embroidered pocket handkerchiefs proclaiming “Business is GREAT.” An appliance concern has issued large lapel buttons saying “Business is Good.” The Public Relations Society of America has asked its members to send all optimistic news they can about their companies to a central clearing house for national distribution.

If empty prattle is an effective weapon against hard times, there is enough of it circulating at present in the U.S. to take care of all eventualities.

Canadians are not able to chase banshees with the same vigour and versatility as their American cousins, but they do have the same tendency to deliver sledgehammer blows at everything except the nail. Prime Minister Diefenbaker thought a while ago that diverting trade from the U.S. to Britain would help. Now he insists that he was misunderstood. Throughout the winter a Government-sponsored campaign to “Do It Now” was carried on. Billboards, radio, television newspapers, all were used to urge those who needed jobs done to have them done at once. More recently the trade union movement has been taking up Mr. Eisenhower's proposal of lower taxes. Claude Jodoin, Canadian Labour Congress president, at the recent CLC Convention, dealt at some length on this theme, seeing in lower taxes a billion extra dollars being put into the pockets of the consumers, “particularly the poorer consumers.”

Meanwhile the employing class, despite their playfulness, are not passing up a favourable opportunity to look after themselves. The Dominion Bureau of Statistics reports that the income of Canadian labour in the one-month period from December to January had declined 4.5 per cent., and hourly wages in manufacturing declined from $1.65 on January 1st to $1.64 on February 1st. The decline between December and January can be attributed mainly to increasing unemployment, but that cannot be said of the later decline.

Mr. Jodoin and the trade unions should take a long look at these figures and then start grooming themselves for some independent working class activity.

What they ought not to be doing is looking to their masters for sensible or helpful suggestions.

Jim Milne,

(Socialist Party of Canada).

Chapter Two: Reform or Revolution (1984)

From Samuel Leight's book, The Futility of Reformism

An acceptance of capitalism is indicative of a political approach that must inevitably enmesh itself with the reformation of the system and not with its abolition. Conversely, a genuine opposition to capitalism implies an understanding and knowledge that should preclude any desire to embark on a reformist program, recognizing the futility of such action, irrespective of the merits of the reforms contemplated. 

Wherever and whenever there is a program of reforms you will always find the "Leaders" ready and willing to perform, but always unable in the end to properly fulfill the promises which originally were so artfully dangled. Reforms never live up to their expectations because the very nature of capitalism invariably sabotages the performance of the reformers. Even when certain problems get resolved they are replaced with new ones, generally of an equal or greater magnitude. Apart from the wasted energy and time that reformism engenders, the danger of such activity lies in the inevitable apathy and disillusionment that arises in the aftermath. These are the breeding grounds for dictatorial regimes. 

It is a political delusion to think that one can shelve the case for socialism and still serve the interests of the working class by helping to reform capitalism in its quest for greater efficiency. The interests of the majority can only be served by the elimination of a system that can never be made to operate on their behalf irrespective of how it is manipulated or reformed. Socialist, political energies are channeled solely for the achievement of socialism — we do not concern ourselves directly with the administration of a system whose major social evils are irremovable notwithstanding the nature of the reforms that may be introduced. Reforms leave the fundamental basis of the system unaltered. It is this social and economic core, resting up on the class ownership of the means of production and distribution, that gives rise to the insoluble problems. 

In conjunction with this approach, we nevertheless urge our fellow workers to maintain and improve their standards of living through active participation in the Trade Union movement. However, such activity should always be kept in proper perspective with the realization that Trade Unions are limited in their scope. They demonstrate the class struggle in ever-constant action, as distinct from the separate policy of reformism to which we are opposed. 

With logic and socialist insight, we advocate peaceful, democratic revolution as the only political course to follow. At the same time, we recognize the necessity for the working class to continuously strive at safeguarding and improving their economic conditions, through appropriate, well-conceived Trade Union activity, in the interim. 

Can the working class "relate" to such a policy? We emphatically claim that they can, and should —without delay! 

Socialism, of course, can never be established or operated without a socialist majority. Once this fundamental position is fully appreciated it becomes obvious that any so-called Socialist Party that advocates a policy of reforms would automatically attract to its ranks reformists but not revolutionists. In no time at all any Party which naively attempted to take a dual position of reformation combined with "revolution" would be swamped and outnumbered by the reformists and would be politically castrated as far as socialism is concerned. The Fabian Society, established in January 1884, as a Society and not as a Political Party, and the Social Democratic Federation, which changed its name to the Social Democratic Party in 1908, both originating in England, are examples of reformist organizations that, in addition, purported to advocate socialism. The Fabian Society's doctrine was "the inevitability of gradualness," while the SDF referred to their reforms as "stepping stones to Socialism." A small group of secessionists from the SDF, opposing the reformist approach, formed the Socialist Party of Great Britain in 1904 with an object and set of principles that uniquely distinguished them as a Socialist Party in every sense of the term. 

Rosa Luxemburg in her work entitled "Reform or Revolution" written in April 1899, stated in her Introduction: 

"The daily struggle for reforms, for the amelioration of the condition of the workers within the framework of the existing social order, and for democratie institutions, offers to the Social-Democracy the only means of engaging in the proletarian class war and working in the direction of the final goal — the conquest of political power and the suppression of wage-labor. Between social reforms and revolution there exists for the Social-Democracy an indissoluble tie. The struggle for reforms is its means; the social revolution, its aim." 

This statement is fallacious in content and deviates from the significance of her title which poses a choice between reform or revolution. 

Another unacceptable aspect supported by Rosa Luxemburg, is the theory that at some stage of development, due to the contradictions of the system, capitalism will "collapse" and that, quoting, "Without the collapse of capitalism the expropriation of the capitalist class is impossible." We would deny this statement and substitute a vital alternative position: without a socialist working class socialism is impossible! Capitalism has demonstrated its remarkable staying-power and adaptability from crises to crises, through recessions and depressions. And even if a "collapse" occurred, socialism could never be introduced unless the vast majority were already converted to the socialist case and properly organized to attain political power. When this situation happens it would of course be completely unnecessary to wait for a "collapse," because socialism becomes immediately practical. However, in fairness to Rosa Luxemburg, affectionately called Red Rosa by the SPGB for her heroic class-conscious defense in her trial at Weimar in 1907, she also supported a positive role to be played by the working class, and indicated that the workers might achieve power before the breakdown of the system took place. The socialist position looks for no anticipated crash that would mark the death-throes of capitalism—on the contrary, we emphasize that the socialist revolution depends upon a sufficiency of socialists and we work towards this end. 

As and when socialist delegates become elected to the Congresses and Parliaments throughout the world, with a mandate for socialism, they will of course be confronted from time to time with reformist measures, and called up on to either vote or abstain, approve or otherwise. They will be instructed in these matters by their respective Socialist Parties. The guiding principle will revolve around the interests of the working class together with the achievement of socialism. The socialist delegates will therefore act within this framework. They will also never lose any practical opportunity for propagating, at the applicable time, the case for socialism. When the World Socialist Parties finally get representation in the seats of power, we can rest assured that the ruling class and their aides will be churning out a plethora of reforms in order to appease the growing, awakening socialist working class in an effort to delay the inevitable. The foregoing scenario is in no way analogous to the advocacy of reforms as an initial attempt to gain political support' and vote-catching representation. 

With the magnificent, international declaration and enactment that every human being is the common owner, with democratic control, of the means of production and distribution, with free access to all goods and services, a new era commences. Poverty, unemployment, insecurity and war become immediately and irrevocably eliminated. Their cause, the ownership and control of the means of production and distribution by a minority, in a "commodity society," would have been eradicated. The structure of a socialist society makes their existence an economic and social impossibility. What reform, or series of reforms, could match, or in any way be comparable with, this position and attainment? 

There can be no poverty in a classless society, technologically capable of satisfying the needs of the population, with free access to all goods and services. 

There can be no unemployment, or employment, when all men and women are co-owners of the means of production and distribution, giving of their abilities in useful work for society as well as for themselves. 

There can be no insecurity when all "needs" can be satisfied as the result of "common ownership" and "free access." 

There can be no war when humanity is united as a whole without states, national boundaries, or armed forces; with production and distribution solely for use, and not for profit, eliminating money, wages, exchange, and the "market place." 

Audit each of these categories today, after the deluge of all the reforms that have been passed since the advent of capitalism, for complete justification of the case for socialism.

On August 20, 1980 a report from Washington (UPI) stated: “The World Bank estimated this year 780 million people throughout the world are living in ‘absolute poverty.’ It described this as ‘a condition of life so characterized by malnutrition, illiteracy and disease as to be beneath any reasonable definition of human decency’.”

On September 29, 1981 according to the National Advisory Council on Economic Opportunity, “Twenty-five million Americans are poor” and “Another 30 million—if they lose a job, get sick or burn out—could be poor.” On August 2, 1983 the U.S. Census Bureau stated that the number of Americans classified as poor increased by 2.6 million, from 31.8 million in 1981 to 34.4 million in 1982. The official poverty rate, reflecting the portion of the population living in poverty, was 14 per cent in 1981. The 1982 rate was the highest since the start of the “War on Poverty” in 1965, when the rate was 17.3 percent. Of course, by socialist standards, poverty is the economic lot of the whole of the working class, at all times under capitalism—but, be that as it may.

Unemployment in Great Britain reached 14 per cent of the work force in September, 1982; and in the U.S.A. 10.8 per cent in November, 1982—both record figures since the Great Depression and World War II. Canada had a post-Depression high of 12.6 per cent in March, 1983. According to researchers at Williams College and the University of Minnesota, as reported in the Wall Street Journal on October 21, 1982, each percentage point increase in the unemployment rate correlates with 318 additional suicides. They estimate that the current recession is prompting 1,200 to 1,300 suicides a year.

If an unparalleled Arms Race between the major powers is touted as the supposed road to peace, then this futile pursuit alone is sufficient unto itself to condemn the anarchy, wastefulness and social stupidity of modern-day capitalist society. Of course, peace is non-existent under capitalism—in fact, the director of the Stockholm International Peace Research Institute, in May 1977, stated that since September 1945 there has not been a single day in which the world was free of war.

Here, we have only briefly touched upon the major social evils, ones that reforms are completely unable to penetrate with any kind of practical solutions. The reformists, therefore, also direct their ingenuity and efforts towards the “minor sores” of society. These have included so-called high taxes, “the economy,” balancing the budget (but not yours), inflation, violence, crime, pollution, premature death and ill-health caused directly by the system, racism, “freedoms” and “human rights.” And, lest we forget, the “privilege” of working class women having “equal rights” with the men of being exploited on equal terms. Presumably, also, the right to be massacred in the wars, alongside the men, for their masters’ interests—all this in the name of “equality”!

Every major political party in the U.S.A., Europe and elsewhere that has taken on the job of running capitalism has done so on a reformist ticket, failing dismally as far as the interests of the working class are concerned. And it can never be otherwise. Capitalism will always remain a system of perpetual crises, with unending competition and confrontation, both on the social and individual levels, all this impervious to reforms and reformism.