The Forum: Concerning Rates and Taxes. (1909)

Letter to the Editors from the August 1909 issue of the Socialist Standard

Mr. John Rhind (Old Trafford) writes:

(1) I have often heard it stated in the Socialist Standard, as well as by members of your Party, that the working classes do not pay rates in the form of rent. I fail to see the truth of that statement in view of the fact that my landlord has raised my rent in consequence of the local rates being increased.

(2) Again, do not the workers pay taxes (national) in the form of additional charges being made on such commodities as beer, spirits and tobacco, when, as recently, the duty on these things has risen ?

(3) If rent is a portion of surplus-value, as you maintain, can it be rightly said that I, for instance, do not pay rent ? My experience is that I receive so much in wages and out of this I pay rent. Do you deny this?—John Rhind

[We have numbered the items for convenience sake.—ed. “S.S.”]

As to No. 1 (first correcting the point of the use of the plural—working classes. Our correspondent does not see this in the “S.S.”) Mr. Rhind also fails to see that landlords do not and cannot charge a rental at will, but only as the state of the house-room market allows. Of course the landlords are always on the look out for opportunities to get increased rentals, and the plea of the burden of higher rents will often serve to catch a “flat.” On the other hand an increased demand for house-room will enable the landlord to demand more, while the rates bogey is paraded as the reason. In some of the suburbs of London, such as Walthamstow, West Ham, and Tottenham, rentals have been lowered although rates have been rising. Mr. Chiozza Money, in his “Riches and Poverty” (p. 79), says, and gives supporting opinions for the contention, that the rates are, finally, a charge upon the landowner.

(2) No, the workers do not pay the taxes (national), that is to say are not, by so much, out of pocket; for if in some cases it can be shown that the imposts have the effect of raising the price of commodities, these latter if consumed by the workers enter into the cost of production of labour-power. As a consequence, and in the long run, such wages have to be paid as will meet this cost.

As to the extra duties imposed by the present budget upon beer, spirits and tobacco, we are of opinion that the last has not been heard, by any means, upon this matter. It were well to note that the price of alcoholic liquors has not risen all over the country, and that the Press reports cases where retailers have defied the orders of the brewers to raise the price; these same retailers, of course, doing a roaring trade in consequence. The tobacco trade is, to-day, very largely monopolised, its controllers being in a position, at least for a time, to raise prices, and they are, of course, only too glad of the opportunity to do so when, as at present, with the excuse of the increased duties they seem justified, and the least outcry is to be expected. Their power to exact higher prices is, however, curbed by the tendency of demand to slacken as prices rise. This point is emphasised in the recent manifesto of the brewers on the new budget duties, wherein they show the intimate connection of an increase in prices with a decrease in sales.

The attention of our correspondent is further directed to the following quotation (from the Star of July 19th), which speaks for itself.

“Notices have been received by the retailers announcing that the price of Messrs. Wills’s ‘Gold Flake’ cigarettes is to revert to the old figure.

When the Budget was announced, the price to the consumer was raised to 3½d., but the result has not justified expectation, for the price is now to go back to 3d.

It is probable that other brands of cigarettes will come into line and revert to the old retail prices.”

(3) Do we deny that our correspondent pays rent ? Not likely ! We are not in possession of the facts. However, taking our questioner as representative, he most certainly pays away part of his wages as “rent,” which in this ease is clearly the price of house-room. Now such rent is not all surplus-value, and we have never stated that it is such. Ground-rent, received by the ground-landlord, is distinctly “a portion of surplus-value.” Mr. Rhind’s difficulty is that he has only a confused notion of our position, and space is lacking for us to dual more fully with the matter here. He will find our position regarding taxation in general more fully explained in the October 1904 number of the Socialist Standard, while the particular question of the rates is dealt with at length in the issue of June, 1905.—Editor “S.S.”

Finance and Industry: Rents and the Price Index (1961)

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

Rents and the Price Index

As most rents have risen during the past three or four years, some of them by enormous amounts, it may be a matter for surprise that this does not seem to have shown itself in the Ministry of Labour’s Index of Retail Prices, which now stands at 12 per cent above the level of January 1956.

The fact is that the Ministry's separate Index figure for "housing" costs, which consist mostly of rent and rates but allows also for the cost of repairs etc., has risen continuously for 10 years and particularly since 1956. It is now a third higher than in January 1956 and two-thirds higher than it was in 1950.

This sharp rise has had comparatively little effect on the final Retail Price Index because people are assumed on average to spend over nine times as much on all other items of expenditure as they do on rent, rates, etc. So a rise of 66 per cent in the rent figure would raise the final Index by about 6 per cent only.

A movement of food prices would have four times as much effect on the Index because people are assumed to spend four times as much on food as on rent etc.

Of course many people will find that they spend far more than the assumed proportions on rent etc.; which would not of itself invalidate the Ministry's assumption because there are some rents etc. which represent a very much smaller percentage, and both extremes enter into the average. It was recently shown in an official publication that the average council house rent in Scotland is 9s 10d. a week (the lowest being Dumbarton, only 2s. 10d). Corresponding averages for say London would be about 35s. to 40s.

Nevertheless, with the rapid rise of housing costs in recent years it is probable that a larger proportion than the official 8.7 per cent of expenditure goes on rent, rates, water charges and repairs.

Yet despite the rapid rise in recent years the average increase of rents since 1938 has been far less than the percentage increase of food prices, clothing prices, or drink and tobacco.

American Depression

Politicians and Economists giving their views on the course of trade and business prospects are curiously like doctors telling the relatives how the patient is fairing—probably for the same reason, that they arc not sure.

If the doctor felt perfectly confident that his diagnosis is correct, and that he knows precisely what to do he would be able to say “ I have administered the remedy and by 9.30 a.m. exactly tomorrow morning the patient will start improving rapidly and will be out and about a week from today ".

And if the governments and their economic advisers could make exact diagnoses and prescribe specific and certain remedies, they could be equally confident. But as it is, they are never quite sure whether things are getting better or worse. If they fear the worst it is best not to say so because something may turn up, and in any event spreading gloom may itself help on a downward slide.

So it is not surprising that the reassuring statements of last autumn have slowly given place to admissions that American industry is in a rather bad way.

Last September Mr. Per Jacobson, Managing Director of the International Monetary Fund, at an interview in Washington was sure that the United States was not heading for a full-fledged recession, only a slackening in business activity, and on February 20, 1961 the Financial Times correspondent in New York could report, "U.S. business still optimistic. Belief that upturn is not far off". But only a week later the President's council of economic advisers was informing Congress that it would be unreasonable to expect recovery until after mid year and simultaneously the news of six million unemployed, the worst since before the war.

And the chairman of the council disclosed other reasons for not taking an optimistic view. He pointed out that even when the upturn in business docs lake place it will not be the solution to the longer term problem of a growing gap between production and productive capacity.

Since 1955 the economy’s "chronic slack"—a gap between what the country can produce and what it actually produces had shown a "distressing" upward trend. (Guardian, 7.3.61).

The Slum problem

The American President is going to do something about the slums, and the Times correspondent in Washington, writes, with unintended humour; "That something has to be done and done quickly has for years been evident to those driving through slum areas to the trim suburbs (Times 10/3/61).

What makes the Times correspondent think that because an evil has been obvious for years, that something has to be done about it quickly or at all? It is over a century since the British government and philanthropic agencies started to abolish the slums and they are still with us.

Anyway in America, according to President Kennedy there are "40 million families living in sub-standard houses". but at the same time “one out of every six construction workers is unemployed, and house building dropped by 18 per cent last year to the lowest level in the past decade".

Innocence of Journalists

If the Times correspondent in U.S.A. is naive in supposing that capitalism and slums are incompatible, his Daily Mail colleague Mr. Don Iddon is worse; he writes like a true innocent abroad. In the issue for 10 March he tells of having been stopped by beggars on Broadway. “shabby men asking not for 'a dime for a cup of cawfee’. but for a quarter (about 1s. 9d.) for food”. Because of this and other things Mr. Iddon says. “Kennedy's America is beginning to puzzle me". But why should he be puzzled because queues are lengthening at the employment exchanges, and the motor show rooms are almost deserted, or because 166.000 car workers are unemployed and there are a million brand-new unsold cars? Mr. Iddon has lived for quite a while and has had abundant opportunities to get around and see things in different parts of the world so why should he be puzzled because America shows the same kind of happenings as other countries and other times?

Mr. Iddon tells how stock exchange speculators can make fortunes with a few telephone calls (he himself made $1,500.) "Yet good men, not drifters or drunks, are panhandling in the streets and women and children are queuing up for food in the Bronx and Brooklyn at relief centres".

May we let Mr. Iddon into an open secret about this country? That about two million people a year, including unemployed and impoverished pensioners, go to the Assistance Board for help!

What Next ?

The big political parties and the Labour Party above all have long been stressing the need for more investment to expand and modernise factories, plant and equipment. The argument is that this will make production larger in the years ahead and that it is absolutely necessary in order to be able to sell at low prices and meet the competition of other countries, which are, they say going in for investment on a larger scale than does British industry.

When therefore the Treasury announced in February that investment in manufacture has been rising very fast and that the building of new factories this year is expected to be 40 per cent above last year, there was quite a lot of satisfaction, not to say pride among those who wanted this to happen.

Two elementary factors seem however, to have been overlooked. The first is that all countries are engaged in the same competitive rat race of hoping to be better off in the future but not now.

The second is that a sudden burst of 40 per cent more factories will be followed by a slackening off of factory building and by a burst of additional output when they are completed, and this in a situation in which the "sellers market” phase after the war has long since passed and been replaced by a phase of greater difficulty in selling, and keener competition.

Edgar Hardcastle

The Socialist Forum: A Question on Rent. (1931)

Letter to the Editors from the March 1931 issue of the Socialist Standard

A reader in St. John, N.B., Canada, asks a question about rent.

“Does the rent that the worker receives as part of his pay become part of surplus-value after the landlord gets it, or is it only the building labourers, etc., who are exploited by the landlord.”

Reply:

The worker is exploited when he works, not when he buys things—whether he buys food, clothing or shelter. The position as regards the rent paid by the workers is the same as in the case of other necessities of life bought with their wages. Rent is the price the workers pay for shelter, and it figures as part of their cost of living. Where rents are low, wages will tend to be low also. The landlord is in the position of other capitalists. Subject to various factors, which interfere with the tendency towards a uniform percentage return on all capitals invested, the landlords will tend to receive the same return on capital invested in house-building or house-purchase as they would receive if they invested in any other investment field.

Editorial Committee.

50 Years Ago: Scarce houses and high rents (1973)

The 50 Years Ago column from the February 1973 issue of the Socialist Standard

The two things, shortage of houses and high rents, generally coincide. Given the first, the second follows. The capitalists who are interested in the production of any commodity always prefer to see the supply short of the demand, because it enables them to raise prices.

Supply and demand are responsible for fluctuations in rent, while cost of production is the main level between the two extremes. When rents fluctuate upwards, either the workers must have increased wages to enable them to pay, or they must go short of other necessaries.

The two alternatives before the wage worker are, therefore, to pay the landlord and go short of other necessaries, or struggle for a higher wage. But this is as much the concern of capitalists generally as it is of the workers. If capitalists require a certain standard of efficiency in their wage-slaves, the latter must be fed and clothed up to that standard. The whole question, consequently, resolves itself into a tug-of-war between one section of the capitalist class and all the rest, the workers’ standard of living taking the strain. At the moment the housing interests have the pull.

This explains somewhat the deep concern of writers in the capitalist Press about the shortage of houses and high rents. Until rents are reduced, capitalists generally cannot enforce the wage reductions they so earnestly desire without seriously impairing the efficiency of their wage-slaves.

The capitalist system never did and never can insure to the bulk of the workers decent and convenient houses in which to live without overcrowding.

(From an article “Rents and Houses” by Fred Foan in the Socialist Standard, February 1923.)

Why must the rent go up (1972)

From the February 1972 issue of the Socialist Standard

House-property is, proverbially, the best investment. The proverb in fact dates back to before the first world war, when over 90 per cent of the households in Britain were rented from private landlords. The legislation for rents at present being framed by the government has already given it some fresh vigour. A house bought as investment—that is, for income from unfurnished letting—may now cost half as much again as a year ago, in a rising market created by anticipation of the new Act.

Today about 20 per cent of houses and 30 per cent of households are privately rented (the figures given by Robert Millar in The New Classes, 1966, and D. V. Donnison in The Government of Housing, 1967, are 21 per cent and 28 per cent respectively). The difference is accounted for almost entirely by furnished letting. Nearly 50 per cent of houses are owner-occupied, and the remainder—approximately a third of the total—are council-owned dwellings. The only other mode of tenure, by housing associations, is statistically insignificant : less than 1 per cent.

The proportions vary, of course, from place to place. The 1965 Report of the Committee on Housing in Greater London informs us that while Kensington has only 5 per cent council tenants in its population, Dagenham has 67 per cent. Nearly half of Newcastle lives in council houses. Under Labour governments since 1945 local-authority building has been favoured over building for sale, while the Tory emphasis has been the opposite. In rural areas council building is small-scale, concerned chiefly with housing the elderly whose working lives and therefore their tenure of tied farm cottages are over. Over Britain as a whole, however, more than half the population are tenants, and have to pay the rent.

All private tenancies except those of furnished accommodation are governed by the Rent Acts of 1957 and 1965, which lay down control of rents and security of tenure. “Furnished” lettings have only minimal sketchy controls. The tenant—usually of a flat or rooms—may be evicted at two months’ notice. He may appeal to a local Tribunal over his rent, and be given six months’ security while he does so; but legal intervention ends there. This is the only form of letting in which a market exists. There are special agencies for directing tenants to furnished flats, the normal fee being one week’s rent.

The 1957 Act solidified the processes begun by the Rent and Mortgage Interest Act of 1915 (which marked, in fact, the beginning of the end of private building for letting). It fixed rents at the figures being paid by tenants in 1956, but with a “repairs increase”. The aim was to arrest the deterioration of older houses with rents kept low by the previous legislation. Landlords had protested since the first world war that rent restriction made it impossible to maintain houses decently from income. From the governmental point of view, slums were being created by the failure of proper maintenance; to allow two-fifths extra on rents was at least a palliative.

The next few years opened disparities, however. Under the 1957 Act, rent control ceased when a house became vacant: the owner could charge what he liked to the next tenant. This itself was an inducement to “Rachmanism”, the harrassing of statutory tenants to leave so as to make way for exorbitant rents. More generally, as wages and prices rose in the nineteen-sixties a wide gap appeared between the “controlled” and the “decontrolled” rent. To give examples, a London suburban house built before 1914, in reasonably good condition but lacking modern amenities, might have been let before 1956 at 19s.6d a week; and the increase permitted by the 1957 Act took this to 27s.6d. Should the tenant have died or moved away in, say, 1963 the house immediately became available for letting at £5 or more.

The 1965 Act was to some extent a consequence of the newspaper publicity over Peter Rachman’s activities. It extended controlled tenants’ security of tenure to the decontrolled, who were now to be known as “regulated”. Local Rent Officers were set up, to consider applications from tenants or landlords of these properties to have “fair rents” settled-upon and registered. These are for three-year terms, and supply-and-demand is excluded as a factor in determining rent. To return to the example of the last paragraph, the “fair rent” of the same house under the 1965 Act would be perhaps £3.15s. a week.

Theoretically, the 1965 Rent Act was a tenants’ charter. In practice, more landlords than tenants invoked it. “Decontrolling” after 1957 had been so new a phenomenon that many landlords has not fully grasped the opportunity offered, and had been cautious about asking rents hugely disparate from “controlled” figures. Controlled rents became a mounting grievance amongst landlords, however: houses paying not much more than £1 a week, when one might rent a garage for not much less !

The governmental problem has been to try to maintain the stock of habitable houses. The improvement grants system has had hardly any effect on landlord-and-tenant housing. A landlord may increase rent by, annually, one-eighth of his own expenditure on recognised improvements. If he received a grant of £400 (the maximum standard grant under the pre-1969 system) and spent £400 himself, the extra return would be less than £1 a week. The revision of the system under the 1969 Act offered the special inducement that a “controlled” house brought thoroughly up to standard would thereby pass into the “regulated” class. So far, it has remained unattractive to most landlords.

The economics are simple. A house standing empty represents a realisable value of, say, £4,500. The installation of a tenant at £4 a week at once reduces the capital value to about £1,500. The return on the capital is, therefore, roughly 7½ per cent. If repairs and insurance are deducted, the figure comes down to about 6 per cent. A fairly substantial outlay on improvements raises the capital value and the income; but within the present rent structure the increases are not enough to make the expenditure worth the property-investor’s while.

Moreover, tenants themselves are frequently opposed to improvements which would raise their rent: a sad demonstration of the chronic poverty-problem of the working class. Before 1969, a landlord could not modernise a house without the tenants agreement. Now, if he is determined about it, he can go to the County Court and apply for an order that the tenant let work be done and pay the consequent increase. In every city there are large areas of near-slum dwellings which, much as the reformers inveigh against them, are sought after and tolerated by the occupants because they are the only cheap housing available.

From the landlords’ point of view, cheap housing is either a safe but poor investment, or one made adequate from neglect permitted by the tenants’ poverty. Since the Rent Acts, the most profitable form of letting has been “furnished”. Most often it means the division of houses into rooms and flatlets, producing multiple rents from single properties; it means tenants can be got rid of, and in any case tend to be short-term; and, besides higher rents, there are means of additional profit from gas and electric meters that arc permitted by law. The obvious effect of this situation has been to reduce further the stock of unfurnished housing available for letting.

The new legislation is therefore a Bill to increase rents—in this case, the controlled-property rents which have been static since 1957. They are to be put on the same basis as regulated rents, which means something over a million households will have proportionately far greater additions to pay each week than were permitted in 1957. As an estimate from the kinds of figures now laid down as “fair rents” for regulated tenancies, the increase is likely to be 150 per cent above the present “controlled” amounts—as against the 1957 increment of 40 per cent.

Conscious of the economic consequences of so heavy an increase in the cost of living, the government proposes that it be staggered over a two-year period. It is proposed, too, that the rent-subsidy scheme become general so that poorer-paid workers can have some or all of the increase made up. This, posing as a paternalistic scheme to help the needy, is a strategy to try to keep wages in check. The principle, which was first applied socially in Family Allowances, is to see that extra money to meet extra expenses is paid only in the cases where the expenses exist. Why, the reasoning runs, should an army of workers claim more pay when the ones to whose need it refers can be selected?

One interesting aspect of the proposed Bill is that it intends taking local-authority houses into the rent structure. Until now, councils have been outside the Rent Acts. They have been able to levy increases according to the needs of their housing accounts, to impose their own conditions of tenancy, to serve notice on tenants without showing reason. Their incorporation in a general system with private landlords, to whom these privileges have been an irritation, may well mean their becoming the pace- and precedent-setters in applications for rent increases in the future.

Why do half the people in this country have to pay rent for their homes? It is an ignominy that is taken for granted: a weekly fee for living in someone else’s house, with the assurance of being able to stay a matter of the temper of parliamentary Acts. The answer to the question is that under capitalism you get only what you can buy, and half the population can buy only the use of a house week by week. Not that the alternative, owner-occupation, gives exemption from the problem. For most people it means crippling mortgage repayments for the greater part of their working lives, and the same shadow always there: if you can’t pay, you’re out.

The proposed legislation is another in the endless series of attempts to solve particular problems in the complex of the housing problem. It seeks to extend the lives of older houses by making investment in them more profitable, and so forestall the need for expensive clearance schemes and the addition to housing lists of still more people in sub-standard accommodation. The fact is that the majority of the working class have never been satisfactorily housed since capitalism began. Even today, many are not housed at all — living in hostels, on muddy caravan sites, with relatives — and, in appalling cases which come to light, in places like the back seats of cars.

In 1872 Engels wrote, in The Housing Question: “But one thing is certain: there are already in existence sufficient buildings for dwellings in the big towns to remedy immediately any real ‘housing shortage’, given rational utilization of them.” This is at least equally true today. Two or three years ago a Housing Minister was slated on all sides for remarking that the number of empty houses in Britain was about the same as the number of housing applicants. Of course it was fatuous—the implication that the two could tidily be brought together, in society as it is. The more important implication, however, is that capitalism’s sovereign remedy of continually building more houses is no remedy at all.

Given houses built to the cheapest standard, whose maintenance is a matter of their profitability as investments, there is no end to the housing problem. As in Engels' day, the clearance and replacement of run-down houses is their being “. . . not abolished; they are merely shifted elsewhere! The same economic necessity which produced them in the first place, produces them in the next place also.” (Today, for instance, many councils use their “old”—i.e. pre-1939—housing estates for families deemed unsuitable for better new accommodation.) Thus, legislation like that of 1957 and its present continuation is inescapable under capitalism, but it cannot answer the problem inherent in the way society is organised.

Bricks and mortar are of vital importance to human beings. Housing is involved in innumerable social and personal questions: health, sex, the facilities for both privacy and sociability, education, recreation. Nor is bad or good housing a matter simply of the building by itself. A dwelling which is suitable at one phase of a person’s or a family’s life will be inconvenient at another; a well-to-do person can buy mobility as necessary or desired, but most people are stuck for life. Underlying it all are the coercions of the society which produces only for profit. One may compare the technical possibilities of our civilisation with the way people have to live, and see that in this regard as in all others Socialism offers what capitalism cannot.

Robert Barltrop

Correspondence: Engels on the relationship of landlord and tenant (1953)

From the May 1953 issue of the Socialist Standard

A correspondent, Mr. C. E. Berry, Torquay, draws our attention to a statement made by Frederick Engels in his “The Housing Question.” Mr. Berry writes:—

  “It appears that a landlord confronted by a tenant is not, per se a capitalist nor engaged in exaction of surplus value.”

Mr. Berry refers to the mention of “land ” in our Declaration of Principles and asks:—

  “Does this mean that ownership of houses apart from land, such as leaseholds, is not contrary to Socialism? Where does common ownership of property divide off from property in personal ownership, i.e. personal property, under Socialism?”

Reply

1. The relationship of landlord and tenant

The passage referred to is one in which Engels criticises the statement of a German follower of Proudhon who had written:—

   “As the wage worker is in relation to the capitalist, so is the tenant in relation to the house owner.”

Engels points out that the above statement is incorrect. People who rent houses (whether they are workers or capitalists) are buying a commodity (the use of a house) from the house-owner. They are not in the position of worker to capitalist, for in this relationship the worker is the seller of a commodity (labour-power) and the capitalist is buying it

The capitalist exacts surplus value when he buys labour-power. He does not exact surplus value when he sells commodities, though it is in the act of selling commodities that he realises surplus value. If the Proudhonist argument were correct then all sales, not only sales of accommodation, would be an act of exacting surplus value—which would produce the odd result that the capitalists exploit each other, and also that the workers are exploited in production and everybody, capitalists and workers alike, is again exploited in the act of buying commodities.

2. That the landlord is not per se a capitalist

Our correspondent’s conclusion from Engel’s statement is that “ a landlord confronted by a tenant is not, per se, a capitalist.”

This overlooks the fact that the capitalist is still a capitalist after he has exploited the workers in production; he is still a capitalist when, as a seller of commodities, he confronts workers or other capitalists—but in the latter act he is a capitalist who is realising surplus value by turning commodities into money.

3. Landlords mid Socialism

Our correspondent’s further conclusion is in the form of asking whether the ownership of houses is compatible with Socialism.

Socialism requires that the means of production and distribution shall cease to be privately owned and become the common property of society. This relates to the means of production and distribution and the consequence of their common ownership will be that the products will be freely accessible to the members of society.

In those circumstances the members of society will take the products in order to consume them. They will consume the accommodation by living in houses and will of course not do so by permission of an individual house owner any more than they will eat bread by permission of a bread owner. There will be no such owners.

Nothing that Engels wrote in “The Housing Question” is in conflict with this. Engels was merely correcting an erroneous statement. He did not draw or imply any conclusion such as these in the question.

Editorial Committee

A ‘New Phase’ of Capitalism (2021)

Book Review from the April 2021 issue of the Socialist Standard

Share the Wealth: How to End Rentier Capitalism. Philippe Askenazy. Verso £16.99. Translated by Gregory Elliott.

As the subtitle suggests, this focuses on one kind of capitalism, the rentier variety, based on the receipt of rents. Askenazy adopts a broad definition: ‘rents are advantages that can be extracted on an ongoing basis by certain economic actors … via economic, political or legal mechanisms potentially open to influence by them.’ The list contained in the ellipsis in our quotation contains not just capitalists but also wage-earners, so it is clearly a very broad definition. The original French edition had the title Tous rentiers!, suggesting that everyone is a rentier.

As an initial example, pharmacists in France are paid about three times as much as their UK counterparts, since the French government has very strict regulations about where new pharmacies can open, and disallows pharmacy chains such as Boots. So the extra income derived from the lack of competition in France is an instance of rent. For a case more in keeping with the profits of companies, consider the cost of medicines, some of which are a thousand times more expensive in the US than in France, owing to the power of US pharmaceutical companies in enforcing patent and property rights there. More generally, in the US the top one percent’s share of national income is now back to the level at the start of the last century.

Real estate prices in London and Hong Kong far outstrip other cities, even New York and Tokyo. This is an example of propertarianism, whereby income derives from two kinds of property: land and real estate, and knowledge (the latter being exemplified by the medical patents mentioned earlier). This is part of the ‘new phase’ of capitalism that Askenazy claims to have identified: rents from property rights and rents from the labour of the ‘unproductive’. But it is not entirely clear what is meant by this last point (other than how low many people’s wages are), though the author does argue that employment is being increasingly divided into low-wage and relatively high-wage types, with medium-wage jobs being cut and people with degrees more and more finding themselves in low-paid jobs; this is known as job polarisation.

In addition, it has to be asked to what extent rentier capitalism is really a new development, and whether it is truly a different kind of capitalism. The book sometimes seems to imply that ‘ordinary’ exploitation by the extraction of surplus value no longer exists or has had its scope much reduced. But after all, capitalists have always benefitted from ‘economic, political or legal mechanisms’ to enforce and increase their profits. And Askenazy offers no real ideas on how to end capitalism, rentier or otherwise, beyond strengthening trade unions, which may help workers defend their wages and conditions but cannot transform the system.

Paul Bennett

50 Years Ago: You and The Rent Act (2007)

The 50 Years Ago column from the September 2007 issue of the Socialist Standard

October 6th is a significant date in landlord’s diaries, for on that day the first instalment of rent increases under the new Rent Act becomes payable. Even if the reader of this article has not the dubious advantage of living in a rent-controlled property, it is highly probably that he or she has already faced a substantial rise in the cost-of-living due to rate-increases or to the withdrawal of housing subsidies.(…)

From all this, one hopes that workers will realise (in case they hadn’t realised it before) just how hollow was Mr. Butler’s assertion that the standard of living would be doubled in twenty-five years, and just how empty were the election promises to solve the housing problem. Of one thing workers can be sure—that this Act will not get more houses built, and will not in the slightest degree solve the problem of overcrowding and bad housing. One might add also that the Labour Party’s proposals to nationalise rent-controlled property and put up the rents will do just as little to solve them. The solution to the problem is fairly obvious—that is, for building workers to build decent homes for the people to live in, without landlords, without investment, and without rent-control or rents. The trouble is that Capitalism does not permit of simple solutions of this kind, and so we go on, eternally arguing about what are not more than the effects of an irrational, crazy social system, instead of doing the obvious thing—to replace that system by a sane and reasonable one.

(From front page article by A.W.I., Socialist Standard, September 1957)

Fire On 9th St (2019)

From the World Socialist Party of the United States website

Whenever out-of-towners imagine Las Vegas, they’ll usually think of the extravagance of downtown and the strip. Glistening lights, risqué showgirls, exquisite food – It’s like a never-ending party that grossed over $19.5 Billion in the fiscal year 2018 alone.[1] Settled in 1905, Vegas became the most populated American city founded within the 20th century. Like all cities, it was built outward, so most of the city’s oldest buildings and poorest neighborhoods are just blocks away from that same extravagance.

Another thing Vegas has in common with other American cities is, unfortunately, the rapidly rising rent prices. A two-bedroom apartment that cost me $695/month in late 2014 is now going for $1,175/month, 5 years later – and most locals would consider that neighborhood sketchy. Just go on Twitter and search “Charleston and Nellis.” If you’re making minimum wage, have a criminal record, or past evictions, then you’ll usually be forced to live in an even less desirable neighborhood. It should go without saying that many of the cheap, “second chance” apartments and extended-stay hotels that will accept people in those circumstances tend to be in those poorer neighborhoods downtown and just off the strip. It should also go without saying that those same residences tend to cut corners to save money.

That brings us to December 21, 2019. It’s 4:13 AM on a Saturday, just a couple hours before sunrise, around the time the Fremont Street Experience starts dying down as tourists and locals head home from their night of drunken debauchery. Just 5 blocks from this scene – about a 10-minute walk away – a fire starts at the Alpine Motel Apartments. Thick, black smoke rose into the air and some residents were jumping from their windows to escape the blaze just as firefighters arrived.[2] Six people were found dead, along with 13 injured (including a pregnant woman), making this the deadliest fire in the city’s history, since the 1980 MGM fire was in unincorporated Paradise, outside city limits. Around 50 people were displaced, days before Christmas. So, how did this fire start? From a stove.

Vegas is well known for its scorching heat, with highs regularly surpassing 115°F in mid-summer. What I think is much less well known is that it also regularly gets well below freezing temperatures in winter. While it doesn’t get as cold as Reno – let alone Salt Lake City – 30°F is nothing to scoff at, especially if you don’t have a heater in your home. And that’s where the stove comes into play. Residents said that the heat in the hotel hadn’t been working, so many of them had to use their stove to heat their apartments.

But it gets worse. The Las Vegas Review-Journal interviewed one of the residents, who said that when he noticed the fire and attempted to pull all the fire alarms, none of them worked, and neither did any of the smoke detectors. [3] He said that the maintenance man attempted to kick the back door open, but it was bolted shut – preventing residents from escaping the fire – so that homeless people couldn’t get into the building and sleep.

Some people may blame the residents for “choosing” to live in an apartment that doesn’t have heat, without taking any time to consider the extent to which it could be considered a choice. Even if we set all the circumstances I mentioned earlier aside, we still have to consider the fact that 69% of Americans have savings of $1,000 or less [4] – half of whom have no savings at all – 78% of US workers live paycheck-to-paycheck, [5] and 80% of Americans are in debt. [6] Remember the old apartment I mentioned earlier? They told me that if I wanted to end my lease early, it’d cost me 1 month of rent for every 3 months left on it. Halfway through, that would’ve cost $1,390, aside from first month’s rent and the deposit at a new apartment, as well as a U-Haul and maybe some helping hands. If you think packing up and moving was a feasible option at all for most of these residents, versus just turning on their stove at night instead, your privilege is showing. Yes, they could’ve informed the Southern Nevada Health District or a tenant rights advocacy group that their apartment had no heat, but for them to help you, you have to send your landlord a written letter informing them of the issue first, [7] and there’d be nothing stopping the landlord from evicting a tenant for a made-up reason if they were to do that. That’s why poor people tend to be much more scared to contact the authorities: fear of retribution. And rightfully so. Contacting the authorities would be assuming that no one’s already informed them, or that anything would come out of it.

It doesn’t take a genius to recognize the fact that landlords have significantly more bargaining power than tenants. The more desperate the tenant, the more they’ll usually be willing to go without. That’s why it’s the landlord’s responsibility to make sure they abide by any rules and regulations put in place for the tenants’ safety. If a landlord willingly chooses to disregard tenants’ safety so they can keep a few extra dollars in their pocket, the blame should entirely be put on the landlord, not a tenant that’s in a vulnerable position.

And that’s exactly what happened here. The landlord already violated 3 different NRS statutes by not having functioning heating facilities, [8] fire alarms, [9] and smoke detectors, [10] and possibly another by bolting their rear exit shut. If those regulations didn’t prevent this, then what will? More regulations? I don’t think so. Regulations only act as a band-aid, but don’t inherently fix the cause of this issue, which is the power imbalance that exists within the landlord-tenant relationship.

Capitalism necessitates profit over everything, even human safety. If a capitalist is left with the decision to spend more money to ensure the safety of their customers, or disregard customer safety and save money, capitalism incentives them to choose the latter. Profit is the end all be all in capitalism; the alpha and the omega. Profit incentives regulations to be broken. We’ve seen that time and time again; this is just another example. If we want to prevent things like this from happening for good, then we need to switch to the only economic system that puts people and the environment first by eradicating the profit motive: socialism.

In a socialist society, there’d be no profit motive, because there’d be no money. There’d be no ghettos people could be coerced to live in because there’d be no wages or classes. Every residence would have functioning heating facilities, fire alarms, and smoke detectors because there’d be no commodities – nothing would be bought or sold; everything would be produced of the highest available quality directly for use, according to a decentralized plan, with resources being calculated in kind. There’d be no private property – no capital – because everything would either be personal property, or it’d be owned in common. There’d be no state, leaders, or countries because we’d finally have direct democracy with an administration of delegates directly subject to the will of the majority, united under a worldwide commonwealth. We could finally use our productive forces rationally, rather than allowing market forces to control them for us.

So, what sounds better to you? Do you want a system that puts profit over human safety or a system that puts human and environmental safety over everything? Contrary to what the mainstream media may have you believe: the latter is possible. But a small minority of us can’t build it alone, only a vast majority of us can build it together.

Jordan Levi

[1] https://gaming.nv.gov/index.aspx?page=144

[2] https://content.govdelivery.com/accounts/NVLASVEGAS/bulletins/272bf75 

[3] https://www.reviewjournal.com/videos/alpine-fire-survivor/ 

[4] https://www.cnbc.com/2016/10/03/how-much-americans-at-every-age-have-in-their-savings-accounts.html 

[5] http://press.careerbuilder.com/2017-08-24-Living-Paycheck-to-Paycheck-is-a-Way-of-Life-for-Majority-of-U-S-Workers-According-to-New-CareerBuilder-Survey 

[6] http://www.pewtrusts.org/~/media/assets/2015/07/reach-of-debt-report_artfinal.pdf?la=en 

[7] https://www.southernnevadahealthdistrict.org/permits-and-regulations/landlord-tenant-disputes/ 

[8] https://www.leg.state.nv.us/NRS/NRS-118A.html#NRS118ASec290 

[9] https://www.leg.state.nv.us/NRS/NRS-477.html#NRS477Sec130 

[10] https://www.leg.state.nv.us/NRS/NRS-477.html#NRS477Sec140 

Rent and Houses. (1923)

From the February 1923 issue of the Socialist Standard

House and tenement owners in Scotland are squealing because the Government, which represents property owners generally, have not taken steps to save them from the results of their own ignorance and neglect. According to the Rent Act passed by the late Government, house owners should give notice to vacate premises when increasing rent. Many of them did not do so, hence numerous summonses for return of rent illegally charged, and a withholding of rent until the debt is paid off.

The Government is on the horns of a dilemma because relief has been promised to the owners, which shall be made retrospective. To break such a promise would, of course, be beneath the dignity of the "Mother of Parliaments”; while to make the tenants pay up would constitute a precedent and look too much like class legislation.. But a virtue can be made of necessity. The Government could subsidise the owners or tell them to pocket their losses. Whichever course they take, the claim will be made that it was the tenants who were considered, because they were poor workers who could not afford to pay.

Obviously, while the Act is in force, it is up to those who own houses to observe it. If they neglect to do so, with all the advantages on their side of better acquaintance with legal forms, they should submit to the penalty without squealing.

Of course, all sorts of unpleasant results are predicted if the no-rent strike is persisted in. One is that house building will cease because no-one will build unless rents are assured.

High rents and shortage of houses are undoubtedly a real hardship for the workers. Though it is nothing new for them to be herded in jerry-built drums with little or no convenience. Hutches that let in the wind, wet, and fog, but keep out the sunlight. Back-to-back tenements and flats, damp cellars and ramshackle attics are quite commonplace as "Englishmen’s homes.” There is nothing new in the fact that families of eight or ten live in a single room and take in lodgers. Pre-war newspapers often cited such instances. Why the outcry ?

The two things, shortage of houses and high rents, generally coincide. Given the first, the second follows. The capitalists who are interested in the production of any commodity always prefer to see the supply short of the demand, because it enables them to raise prices. The commodity in the present case is the use of a house for a period of weeks or months. The house owner realises his cost of production by drawing rents while the house remains habitable. He sells, and the tenant buys house accommodation or shelter, on the same basis and according to the same laws that govern the buying and selling of other commodities. Supply and demand are responsible for fluctuations in rent, while cost of production is the main level between the two extremes. When rents fluctuate upwards, either the workers must have increased wages to enable them to pay, or they must go short of other necessaries. Removals by night are far less common when there is a real shortage of houses, and private landlords as well as local councils invariably give preference to tenants who have a regular job with well-established firms, where they can be got at if pressure to pay becomes necessary.

The two alternatives before the wage workers are, therefore, to pay the landlord and go short of other necessaries, or struggle for a higher wage. But this is as much the concern of capitalists generally as it is of the workers. If capitalists require a certain standard of efficiency in their wage-slaves, the latter must be fed and clothed up to that standard. The whole question, consequently, resolves itself into a tug-of-war between one section of the capitalist class and all the rest, the workers’ standard of living taking the strain. At the moment the housing interests have the pull.

This explains somewhat the deep concern of writers in the capitalist Press about the shortage of houses and high rents. Until rents are reduced, capitalists generally cannot enforce the wage reductions they so earnestly desire without seriously impairing the efficiency of their wage-slaves. The agitation is on a par with the Free Trade movement of Cobden and Bright. The free importation of foreign corn was immediately followed by wholesale reductions in wages, because the workers could live more cheaply.

The capitalist system never did and never can insure to the bulk of the workers decent and convenient houses in which to live without overcrowding. The "council houses" are no better and no cheaper than those of the jerry-builder. House owners to-day know quite well that overcrowding suits their pockets far better than overbuilding, hence the demand that house building shall be left to private enterprise.

What is wrong is capitalism: private or class ownership of the means of wealth production and distribution for profit. The workers do not live on profits; why, then, should they produce for profits? They should organise politically for control of the State machinery in order to establish a system of society based on production for use. Under such a system, where the people controlled production and distribution through democratic administrations set up by themselves, houses would be built when and where they were needed. The wants of the people would determine the nature and extent of all production instead of, as to-day, the profits of a ruling class.

F. Foan

The Housing Question, Again (1967)

Book Review from the August 1967 issue of the Socialist Standard

Housing, like everything else under capitalism, is a commodity. To get the shelter they must have to live, human beings are forced to pay for it. Naturally, the standard of housing they get depends on what they can pay—and what most can pay is, thanks to the wages system, restricted by the price they get from selling their mental and physical energies to an employer. So that under capitalism the housing standards of most people are restricted to what they need to keep themselves in working order. Or, rather, this is the ideal. In fact, it is never achieved and many workers have to live in conditions which even capitalism admits no human being should have to suffer. Professor Donnison, who was a member of the Milner Housing Committee, argues, in a recent Pelican book The Government of Housing, that such kinks in the housing market can be ironed out.

After examining the needs of households and how they vary through a person’s life (unmarried, married with children, after the children grow up, old age), he says that it should be possible to work out a housing policy which gives everybody the type of housing they “need”.

Building houses is a business and those with money invested in it expect to get the normal rate of profit. So it is no use working put a policy unless you can ensure that the houses can be sold. The housing problem, as Donnison sees it, is how to redistribute demand (“effective” demand, of course) for housing to those who need it so that the housing market can be sustained:

  The difficulties of the richer countries arise not from an absolute shortage of personal income required to meet housing costs, but from an unequal distribution of incomes amongst households, and from a relationship between incomes and housing needs which is ill-matched, both in terms of income groups and in terms of the lifetime of individual households.

Donnison’s solution is to pay housing allowances “to enable poorer households to compete more effectively in the housing market”.

This is a classic case of a “redistribution of misery” a la Beveridge Report. The total (effective) demand of the working class for housing is not to be increased but is to be redistributed more efficiently so that people can buy what they need. Socialists have always denied that this was the problem. As far as the working class are concerned the problem is that they can’t afford the housing that human beings could—and therefore should—have. And we're not talking about minimum utility buildings for workers, but about houses for human beings. This problem will last as long as housing is a commodity and as long as people's “effective” demand is restricted by the wages system; that is; until capitalism is replaced by the common ownership and democratic control of the means of social life. Socialist society, where housing, like everything else, would be produced for use and where buying and selling would have gone, would only be faced with a technical and administrative problem here and not with a financial one. We wouldn't want to underestimate the work of planning involved but some of the research techniques (population forecasting, land use surveys, town planning) favoured by Prof. Donnison could easily be adapted for use in the non-commercial society that Socialism would be.

The book is written for the “experts”, those concerned with working and carrying out housing programmes, but that’s no reason why the rest of us should not have a look at it, especially as there are some shrewd comments on past reforms in this field. Donnison is one of the few to see that the 1965 Rent Act (hailed as the repeal of the Tory Rent Act of 1957) “is in the longer run a measure for the raising rather than the lowering of rents”. In popular usage the word “slum” is used loosely, but for slum clearance a precise legal definition must be reached. One result is that ‘uncertainty about the present criteria discourages local authorities from condemning houses whose unfitness may be humanly speaking obvious, but legally speaking questionable”. In Britain the danger to health, as from damp or lack of air or water, has been the criterion for classifying buildings as slums. A slum, in law, is an insanitary house. Local authorities have a certain amount of choice as to how many houses they declare unfit (“Many authorities are reluctant to look beyond the number of slums they are administratively and financially capable of dealing with during the next few years”). So, clearly, the number of slums so-designated is no guide to the real number of unfit houses. But more, some houses are bad from other than health reasons, as from overcrowding or mismanagement. A recent Act does allow councils to deal with such cases but still, as Donnison says:

  If the replacement programme is to be greatly enlarged, an increasing number of authorities will find that they have cleared all the houses that could properly be described as 'unfit' yet they will not have eliminated bad housing conditions.

An interesting confirmation of the Socialist argument that one reform leads to another problem is over rent control and the rates. Rent control was supposed to make the poor better off (in fact, at best, it just stops them becoming worse off). However, instead of paying high rents many had to pay high rates:

  In this country rent controls have permitted the rates levied on poorer households to increase to levels that would otherwise have been politically intolerable. Thus a large share of the revenue of which landlords were deprived as a result of rent control coupled with inflation was not retained by tenants but diverted to local authorities.

The recent rate relief reform was brought in to solve this problem, created in part by the rent control reform. Who knows what new problems this new reform may cause?

Donnison is good on immigration, often canvassed as a cause of bad housing. In practice there is no difference between internal and international migration but in Britain there has been a net outflow of migrants since the war:

  For a dozen years after the war there was a small net outflow of migrants from the United Kingdom; but between 1958 and 1960 this changed to a moderate inflow that rose steeply during the two years before the Commonwealth Immigrants Act was brought into force—an increase that may have been largely brought about by the impending Act itself. But by 1964 the net movements of migrants was again an outward one. Further restrictions imposed since then and the recent increase in emigration from Britain will ensure that this loss continues.

Socialists have always said that migrants are further victims of capitalism’s bad housing not its cause. Donnison, writing of London’s housing, confirms this:

  Restriction of immigration from overseas will not have a major effect; the immigrants’ plight is the outcome not the cause of London’s housing difficulties, and if the inflow of immigrants is stopped their places will be taken by people from other parts of the country—or a number of essential jobs will remain unfilled.

There is no doubt that the Tory and Labour governments introduced immigration control not for economic but for political reasons as a sop to colour prejudice. So much for Labour’s professed stand for the brotherhood of man.

Adam Buick

Voice From the Back: Hobson’s choice (2015)

The Voice From the Back column from the October 2015 issue of the Socialist Standard

Hobson’s choice

You have found work in the city but need somewhere to live, your choice is limited. ‘The shockingly bad rental flats, based mainly in Britain and the US, repeatedly appear online among lists of the worst homes available to rent. In one cheeky advert, a tent in the garden of a property in San Francisco is being advertised for £458 per month, while another ambitious landlord has listed a cupboard in Paddington, west London, for £160 per month. Elsewhere in Rheims, France, a room with a shower and toilet fitted next to the kitchen sink will set tenants back £169 per month, while a horrendously cramped room in Islington, north London, with a kitchen doubling up as a bedroom will set tenants back a staggering £730 per month’ (Daily Mail, 4 September).

Embarras de richesses

We produce but do not possess. Indeed, ‘for every dollar of wealth created, 93 cents goes to the top 1%’ (truth-out.org, 3 September). Members of the owning class can live where they want when they want. In preparation to accommodating King Salman bin Abdulaziz of Saudi Arabia and his huge entourage last month one five star hotel, closed to other guests, was transformed. Crates containing golden mirrors, end tables, lamps and hat racks were unloaded and red carpets ‘laid down in hallways and even in the lower parking garage’ so that the parasites did not ‘have to touch asphalt when departing their custom Mercedes caravan’ (Politico, 3 September).

Killing is my business

The Saudi ruling class, backed by the USA, is using armed workers and advanced weaponry to enforce regime change in neighbouring Yemen.

Wars raging in the Middle East and elsewhere mean business is good for arms manufactures such as Textron. This Massachusetts-based manufacturer of cluster bombs, helicopters and jets had its stock upgraded recently ‘fromneutral to buy by a Citigroup analyst’ (vocativ.com, 4 September). The brutal Saudi regime, which has beheaded more people than the Islamic State so far this year, has used cluster bombs in Yemen.

Migrant misery

War is undoubtedly one of the main reasons why millions have been, and continue to be, murdered, mutilated or forced to migrate. Over 2000 people have died taking the perilous but profitable for some journey from Libya to Europe. There is money to be made out of such misery: ‘with militias controlling large swathes of land, their attentions have turned to the people who cross their territories. The fighters assert they are bringing order to the country as they detain the refugees, yet these people’s lives have become valuable commodities to the militias as they try to solidify their positions in the country’ (vice.com, 4 September).

Hell awaits

You have the stuff of migrants’ dreams: somewhere to live and a place of work, but neither are secure. Your life is still at risk. Examples of death at work are legion, The BBC reported recently (1 September) that a ‘Dundee company has admitted health and safety failings after a worker died while cleaning out a chemical tank … The 33-year-old was sent in to remove debris from a chemical tank with limited protective clothing in August 2011… Dundee Sheriff Court heard that Mr Conway was sent into the tank containing volatile chemicals while wearing only trainers, tracksuit bottoms and a t-shirt and fleece.’

Slowly we rot

Somehow you reach the ever-increasing age at which you can draw your dwindling pension (delayed wages), but are you in any condition to enjoy your retirement? Is a care home on the horizon? ‘England’s care home regulator has repeatedly failed to act on official warnings from coroners in cases where elderly residents have died unexpectedly, the Bureau of Investigative Journalism has found. The Bureau has examined 23 cases in which coroners warned that people could die in future if care providers did not make changes’ (The Bureau of Investigative Journalism, 2 September).

Defend the indefensible

This is what the head of the Care Quality Commission said he was not going to do in relation to the above, but the 1% are happy to defend capitalism – at a safe distance. Yet maybe the Egyptian billionaire who ‘has offered to buy an island off Italy or Greece in order to rehouse hundreds of thousands of refugees fleeing Syria and other conflicts’ (Daily Telegraph, 4 September) is on to something. Come the revolution, any expropriated capitalists who do not want to live in a world of production for use and free access could be accommodated on such an island.

The Law won (2018)

Pamphlet Review from the June 2018 issue of the Socialist Standard

‘Rent Strike. St Pancras 1960’. By Dave Burn. (Past Tense. £3)

In 1959 the newly-elected Tory Council in St Pancras in central London – the voters had just kicked out the previous Labour one – introduced, in accordance with the 1957 Rent Act, a new rent scheme for council tenants which meant huge rent increases for most of them. The tenants organised to resist, calling first for a refusal to pay the increase and then, when the Council refused to negotiate, a complete rent boycott. Two of the tenants’ leaders were chosen to be test cases with the other tenants organising to try to prevent their eviction. They failed as a massive police presence enabled the bailiffs to enforce the law. The evictions were followed by what was described as the worst riot in Britain since the 1930s as hundreds of tenants protested outside the Town Hall but were beaten back by the police.

The Labour Party regained control of the council at the 1962 elections with a promise to reverse the Tory rent scheme. They found that this was legally impossible and that if they had tried they would have been personally ‘surcharged’ for the loss of revenue; all they could, and did, do was to rehouse the two evicted tenants’ leaders.

This pamphlet, originally published in 1972 and now for some reason republished, admits that the tenants’ campaign was a failure but attributes this to relying on electoral action, implying that had they resorted to ‘direct action’ they could have won. This is open to serious doubt as the tenants were up against not only the law but the force of the state machine. The sad fact is that all they could have hoped for was some modification of the scheme to remove the worst anomalies.

‘Direct action’ – reformism by blows – is not able to be any more effective than reformism by voting for a reform-promising political party. It can’t make the state go away.

Adam Buick

"Revolutionary Political Action" (1921)

From the October 1921 issue of the Socialist Standard

Communist Brand.

In the leading article in the September Socialist Standard the Communist Party’s Caerphilly Election Address was quoted from as follows:

 Pledged as it is to Political Action the Communist Party is enabled by this opportunity to demonstrate just how far and in what way Revolutionary Political Action differs from the creeping thing the worker has learned to know and to hate as Parliamentarism.

The article went on to say: "If the election has provided the Communist Party with an opportunity to explain the meaning of Revolutionary Political Action, then that Party has certainly failed to take advantage of this opportunity."

If the Communist Party failed on this occasion to make clear what they mean by revolutionary political action, there have been other occasions when they have taken the opportunity. On the Poplar Board of Guardians sit two members of the Communist Party, A. A. Watts and Edgar Lansbury. On June 22nd, at a Board meeting of the Poplar Guardians, the General Purposes Committee recommended a list of reductions in wages of men employed by the Board, building labourers, women sewing machinists, and bakers. What did our two exponents of "revolutionary political action” do? They voted for the reductions!

It was only when the following recommendation was made, viz., “That our action be approved and confirmed and that the wages of the above-mentioned officers be further reduced by 2s. 6d. per week each for every fall of 10 points in the cost of living under figures below 120,” that Edgar Lansbury said, "I’m not opposing the reductions. We’ve already agreed to it, but I don’t like us pledging ourselves to do it in the future.” (Quoted by "Workers’ Dreadnought,” 2/7/21.)

Who have been louder in their denunciation of this principle of the cost of living basis of wages, that the workers should for ever be tied to one bare level of subsistence, than the Communist Party? Yet here we have two of its members lending it their support.

In the "Industrial Notes” in the "Communist” (28/5/21) occurred the following passages:

  Will somebody explain what has happened to the committees set up by the Parliamentary Committee of the Trades Union Congress to consider joint action against wage reductions.
   One explanation offered is that the members of the sub-committees have been so busy negotiating reductions for their own members that they have had no time to meet.
   Agreements, even, are being broken and strikes are resulting. Aggression by the boss class is seen on every hand.

Clearly a case of the "pot calling the kettle black.” Even Councillor Charlie Sumner, not a revolutionary Communist, but just a Trade Unionist who believes in "a fair day’s wage for a fair day’s work,” said, “Yes, but d’you see, the baking trade has always been a terribly sweated trade, and it isn’t to say that we should join in just because everyone else is coming down on them.” The same is true, of course, of women sewing machinists. Even this failed to move our “revolutionaries”; Sumner, as a matter of fact, voted for the reductions.

A. A. Watts was himself, as Chairman of the Sub-Committee, the signatory to a recommendation to reduce relief to the poor (excepting widows and aged persons) by 10 per cent. The Communist Party’s “revolutionary” Caerphilly Election Address demanded “for the unemployed work or maintenance at full Trade Union rates.” The case of Poplar illustrates how the Communist Party deals with the unemployed when it has the power. Evidently there is little to choose between the Communist Party and those ancient adepts in the art of “piecrust” promising, the Liberal and Tory Parties.

And have Watts and E. Lansbury been expelled from the Communist Party for violating their “principles”? Not a bit of it. Only Miss Sylvia Pankhurst has been expelled for not handing the paper, which published the information, over to the control of the Executive Committee of the Communist Party, of which Watts is a member.

Another occasion is taken advantage of by the Communist Party to show what they mean by revolutionary political action. In the “Communist ” (17/9/21), under “Notes of the Week,” occurs the-following:

  We, as Communists, welcome Poplar’s action for two reasons. The first is that work or maintenance at full trade union rates is a demand which the Communist Party has always pressed, for the revolutionary reason that capitalism can neither refuse it with dignity nor concede it without suicide. Secondly, and more importantly, because the Poplar Council has carried out the advice of the Third International: To capture the machinery of bourgeois administration and use it for revolutionary ends. (Communist’s italics.)

In regard to the first reason, imagine, if you can, capital committing suicide to save its dignity. The idea is too ridiculous to need serious refutation. The Communist Party has been in existence over a year now, and so far capital has refused this demand, which the Communist Party “has always pressed,” and risked its dignity. As for committing suicide—— 

And what is the revolutionary end that the Labour Party has captured the “machinery of bourgeois administration” to effect? The Poplar Borough Council has refused to levy the precepts of the L.C.C. and other outside authorities as a means to bringing about the equalisation of rates. I take it then, that if this revolutionary end is achieved, the system of society advocated by the Communist Party and called by them “Communism,” will have been inaugurated? Let us see.

Prior to the Rent Restrictions Act the effect on the working-class of equalisation of rates would have been nil. There was an excess of supply of houses over demand and rents were competitive. Higher rates in one borough had to be compensated by lower rents, so that the total amount paid for a house was the same all round for the same class of house. Cases have been cited in the Socialist Standard where rent has even fallen while the rates have been rising. But under the Rent Act the amount of rates in excess of the rate levied in 1914 is added directly to the rent allowed by the Act. This fact gives credence to the idea that the working-class is affected by high or low rates. But what would naturally take place if rates were reduced in working-class boroughs as a consequence of equalisation? Wages, especially in the state the labour market is at present, would almost immediately reflect the reduction.

But, apart from the benefit the capitalists who exploit the workers in London would derive as a consequence of the reduction in the latter’s cost of living, who would really benefit by the change? The big factory owners and other Capitalists who have premises in Poplar and other boroughs whose rates would be reduced. And it would be pertinent to ask who is paying for the floods of literature, some of which is sent to voters in stamped envelopes, with which Poplar is being deluged? No working-class organisation dependent on the pence of its members and sympathisers could afford it at the best of times. The whole thing, so far as the working-class is concerned, is simply summed up: it is yet another red herring serving the purpose of diverting them from their real interests and from what should be their only goal, Socialism.

T. D.

Capital Expenditure (2018)

Book Review from the November 2018 issue of the Socialist Standard

‘Big Capital: Who Is London For?’ by Anna Minton (Penguin, £8.99)

Though written before Grenfell, this is a devastating analysis of the housing situation in London, with implications for other places too. Housing, Minton says, is a safety deposit box and a cash cow, with the rate of return on land and property far exceeding economic growth, let alone rises in wages.

At one end of the market are the super-luxury flats owned by Russian billionaires and Chinese investors, the transnational elites who are described as Ultra High Net Worth Individuals. At the other end are the ‘beds in sheds’, unauthorised dwellings in back gardens, and rented bed spaces, where someone may sleep in a bunk, with four people sharing the front room of a terraced house. There are also the ‘hidden homeless’, some of whom actually sleep on buses.

Most people, of course, are in between these extremes, either renting or owning and often suffering from the inflated cost of housing. One example given is of a woman who earns nearly £40,000 a year; her partner also works full-time and they have two children, a boy and a girl, but live in a two-bedroom flat. It is better than their previous place because the heating works. She describes her life as ‘middle class poverty’. Many people could afford a mortgage but, because of the high level of rents, cannot save enough for a deposit to buy their own place.

The pressure on housing in London means that many homeless families are rehoused outside the capital. One recent report (Observer 2 September) noted that people who buy houses in Bath to avoid the costs of London are pushing up rents and house prices for locals. Thus developments in London have impacts on other towns and cities too. Forcing those on lower wages into the outer areas of London may give rise to something along the lines of the banlieues in Paris.

Minton traces various reasons behind this appalling situation. The virtual abandonment of new-build council or social housing means a drastic reduction in the availability of lower-priced homes, while the ‘affordable housing’ required in new developments is in reality affordable for very few. Thatcher’s ‘Right to Buy’ policy increased the number of homeowners, but in fact they were leaseholders rather than freeholders and so vulnerable to compulsory purchase schemes. People bought out in this way are rarely given the real market value of their home and so have to move further out, away from friends and family.

There are many other factors involved, including the system of housing benefit, but the basic cause is that under capitalism housing is part of the market system and exists to provide profits for the few rather than decent homes for the many. What may help to bring the whole edifice to an end is the fact that companies are becoming increasingly worried that most of their workers will simply not be able to afford to live in London, and the Fifty Thousand Homes campaign is designed to address this. When business groups state that ‘The pricing out of young talent and the London workers who keep our city moving hurts all levels of society, and threatens London’s status as a beacon for creativity and enterprise’ (londonfirst.co.uk), it is clear that the housing problem affects capitalists as well as workers, though in different ways.

Paul Bennett