‘Money is Irrelevant' (1996)

From the June 1996 issue of the Socialist Standard

That’s the verdict of Sir James Goldsmith, the financier turned politician. A new convert to the Socialist Party, perhaps? Unfortunately, no. When Sir James says that money is irrelevant, he means he has so much of the stuff that he couldn’t spend it all if he tried, he is worth £1,200 million. However, this hasn’t stopped him from making the effort, and he recently pledged £20 million to the campaign for a referendum on the European Union and its single currency, thereby donating irrelevant money to an irrelevant cause.

Sir James’s offensive comment was quoted in the Sunday Times's eighth annual tribute to Britain’s super rich, published in April. This year’s wallow in the cream of the capitalist class appraised the fortunes of five hundred fat cats, worth collectively a staggering £70 billion. This figure is a massive 28 percent higher than that of last year, the highest total since the survey began in 1989:

“Britain’s rich became more than £15.5 billion richer in 1995 in what proved to be a vintage year for personal wealth creation. "

Recalling your miserly two or three percent pay rise (assuming you got a rise at all), you may be forgiven for wondering how you managed to miss out on this bonanza. For most of us, of course, it was more likely to have been a “vintage year” for debt, job insecurity, negative equity and the inexorable struggle to make ends meet. You may be wondering just how the fortunate few came by their even greater wealth. Was it hard work? Thrift? Fiddling their expenses? On the contrary; they didn’t actually do anything:

“A rare combination of record stock market performance, a sharp increase in land prices, a steady rise in art values and a thriving market in the sale of companies has created a sudden improvement in the lot of the rich. ”

If only you’d sensed that thriving market in the sale of companies, you could have got yourself down to the local car boot sale and unloaded a few of those old companies you’ve had cluttering up the garage for years.

Richer and richer

Yes, it’s a funny old world isn’t it?

There you are, packing in the overtime to cam a few extra quid, while Hans Rausing has seen his wealth rise by a stratospheric £880 million—and that’s following his retirement! In fact the average increase in assets amongst this tiny group was £30 million. There were so many millionaires with bigger fortunes queuing to get onto the Sunday Times list that the threshold for entry had to be raised from £25 million in 1995 to £35 million this year. And if these estimates seem astounding, bear in mind that they do not include cash in private accounts!

So what are your chances of joining this well-heeled band? Even less than your chances of winning the lottery:

". ..  no lottery winner has yet made it to the 500 despite . . . rollover jackpots. Until a . . . winner emerges to claim £40m, the most that a winner can hope for is to scrape into the top 1,000 where the bottom line in our database is £10m. Not a bad sum but not serious money."

No, not serious money. If you want to play with the big boys (and they are mostly boys—only 8 percent are women), you won’t be taken seriously without at least thirty five million to your name.

The big boys are people like David Sainsbury, of the supermarket giant, who is worth £1.26 billion. His “salary” rose from £311,000 to £389,000 last year, a cool 25 percent increase. Not that impressive, some might say, for the boss of Britain’s leading grocer. However, this didn’t include his whopping £37.5 million share of the company’s dividends. Interestingly, Sainsbury is quoted as saying: “If I vote at the next general election, it will be for Tony Blair.” Confirmation, if any were needed, of whose interests “New” Labour represents.

Other top dogs include Viscount Rothermere the newspaper publisher, whose family’s wealth tops £1 billion, and there are “unconfirmed reports that his personal wealth in cash alone matches that sum”. Then there is the Duke of Westminster, worth £1,650 million, who “tries to stay in touch with the harsher side of life”. Apparently, he recently took his two children to a drug rehabilitation project “to show them what it was like”. It’s a bit like us going to visit a stately home to see how the other half lives, but instead of pleasure by proxy, the Duke likes a little pain by proxy, just in ease he’s deprived of the pleasure of knowing just how stinking rich and privileged he is.

Different world

Not all aristocrats have fared as well as the Duke, however. The aristocracy of course is no longer in the position of ascendancy that it once was, and incomes for many have reduced dramatically in recent times. If you’ve fallen on hard times lately, you may be eager to hear how these pillars of the community have coped; they do, after all, have much more substantial commitments. Well, the answer can be very simple:

“Though landowning aristocrats no longer dominate the 500 list, they will not disappear completely for several generations. As Simon Howard has shown with his stewardship of Castle Howard in North Yorkshire, it simply takes the auction of one £5 million painting to provide enough liquidity for some years . . ."

So there you have it. You know' those ugly old Van Goghs and Picassos which are making your drawing room look untidy? Get them along to the boot sale with your old companies and you’re quids in.

One of the interesting things about the Sunday Times’s survey is its raison d'etre. It’s difficult to ascertain whether it’s aimed at envious poorer readers, who may drool over the enormous fortunes enjoyed by others, or if it’s aimed at the people who actually feature in it, so that they might also envy those with bigger wads, while at the same time feeling superior to those with less. For many it’s a double-edged sword: if they’re not included they complain, yet when they are included they still complain that they’re either under- or overvalued, depending presumably on whether they are tax exiles or not.

Clearly, the people in this survey inhabit a different world, a world that the rest of us can barely imagine. Many inherited their wealth, while the majority are “self-made” men. Defenders of capitalism try to persuade us that entrepreneurs have acquired their money through some sort of super-human effort, and that they deserve more than the rest of us. But there are only twenty-four hours in a day; only so much work that any one person can do; and whose contribution is more valuable? The entrepreneur who chooses to work ten or twelve hours a day, or the farmer, or miner, of fitter, or firefighter? No matter how hard a worker toils, they will never be rich—but somebody else will. Yes, the fortunes of the wealthy are indeed the results of hard work: yours and mine.

The Sunday Times has at least cleared up a little problem for the government: the whereabouts of the mythical “feel-good factor”, for which the Tories have been patiently waiting to persuade a jaded electorate to vote for them. The feel-good factor is alive and well and living with Britain’s rich, while the feel-conned factor, as ever, stubbornly resides with the working class.

Nick Brunskill

Caught In The Act: Check out (1990)

The Caught In The Act Column from the August 1990 issue of the Socialist Standard

Check out

How much would you pay for a bottle of wine? If you can only run to plonk from Tesco or Sainsbury you are unlikely to have been an enthusiastic participant in the recent auction of the contents of West Green House, the Hampshire home of Lord McAlpine, when bottles of something called Chateau de la Tour were going for around £500

You see Lord McAlpine, who is the kind of jolly, informal fellow who likes to be known to one and all as 'Alastair', is a bon viveur and. as any shopper knows, that means he would look on supermarket plonk as only a little less intolerable than strychnine. Selling up his home does not mean that the noble lord is on the slippery slope which ends in Cardboard City; it's just that he had a fancy to move to another sumptuous place with another collection of antiques, art treasures and all the little bits and pieces which make life bearable for a bon viveur.

He was also, until recently, the treasurer of the Conservative Party, a job which did not entail his growing pigeon-chested over fusty ledgers since it mainly consisted of extracting generous donations to party funds from other exceedingly rich people. His background (Stowe public school, where he managed three ’O' levels) and his present circumstances (inheritor of massive wealth and a powerful position in the McAlpine building firm founded by his great grandfather) made him ideally suited for the job. It is said that in the 1987 election he screwed some £23 million out of his fellow tycoons.

Election realities

As part of his fund-raising during that election McAlpine sent a copy of the Labour Party manifesto to 200 selected top business people. The implication was clear; a Labour government would cost them a lot of money. The fact that this is nonsense — as only a cursory knowledge of recent history reveals - shows how little capitalism is understood even by the capitalists whose privileges are nurtured by the system. But to return to those Labour manifestos: when the parties of capitalism go into an election they do so on the assurance that they stand for the interests of all the people. Vote for us. runs their argument, allow us to implement our programme, and everyone will benefit. McAlpine's ruse, highly successful as it was, reveals the truth that elections are fought over which section of the minority ruling class should be that much richer and more secure, over which investments should receive more protection, over which proposals for working class exploitation promise to be more intense and profitable

McAlpine once informed the House of Lords that he was " . . . the builder of the National Theatre". This kind of assertion is often made by capitalists, we hear of them designing buildings, laying out gardens, building houses and so on when in fact they are not to be seen doing any such thing. McAlpine may have dropped in on tho site of the National Theatre — it was a prestigious enough project to warrant his interest in its progress — but he didn't actually sketch it out on a drawing board, or mix the cement or slap down tho bricks or hang the doors This work was carried out by members of the class who need to work for their living and who got a wage which does not allow them to drink Chateau de la Tour. They build places like the National Theatre and West Green House and they live in mortgaged semis or flats or rented bedsits. And at elections they are so impressed by the specious arguments of people like McAlpine that they surge out to vote to keep his class in power and privilege and their own class in exploitation and poverty. Our class has to eat supermarket food, wear supermarket clothes, live in supermarket houses. But this does not mean we have to have supermarket ideas.

Political packaging

The question is — is there some connection between supermarkets and tired, discredited political non-theories? We only ask because there is. apparently, no truth in the rumour that David Sainsbury is about to apply to join the Labour Party This member of a famous, exceedingly rich family whose fortune is channelled through those clattering check-outs where tho operators have little time or motivation to make any human contact with the patiently-shuffling customers and their laden trolleys, was a valued contributor to the late, unlamented Social Democratic Party. Did he, we wonder, receive one of those manifestos from Lord McAlpine? With the collapse of tho SDP there was a hopeful casting of bait among the partyless members by Liberal and Labour and Sainsbury would be a very juicy catch for them. But he has stated that ho remains loyal to the mould breakers even though they hardly exist any more

As a supermarket chief Sainsbury is probably well versed in the theories about the sales appeal of attractive packaging. So was the SDP, whose favourable attention from the media went some way to disguise the fact that they had little more to offer than bits and pieces of the failed policies of the other parties which they were so ambitious to replace. The same can be said about their leaders, who were supposed to have discovered the cleansing relevance of something called moderation. Jenkins. Owen. Williams and Rodgers had all held office in a Labour government and it took a lot of opaque packaging to obscure their association with the impotence of that government to make capitalism work as they had promised

Well this is all history and some history it was: the risible Alliance and then the chaos of the attempted merger with the Liberals and Owen's refusal to accept a vote which went against his wishes. Now he is no longer leading a party, which leaves just Rosie Barnes and John Cartwright, neither of them sure about who is leading whom. And all of this disreputable manoeuvring has been within the party who said it would not play the old game of party politics. So the mould remains unbroken. The SDP deserves, and will probably get. no more than a footnote in British political history

Will Sainsbury stay with them? Whatever he decides, it need not concern the check-out operators nor the queues in his shops Whichever government has held power Sainsbury has continued to prosper; capitalism has gone on its way undisturbed. The company's slogan is that in their shops Good Food Costs Less. What price consistent, viable political principles?

Political pollution

When supermarkets came on the scene thy were recommended to us as part of something called the Retailing Revolution. What that meant was the abolition of the system where customers stood at shop counters while assistants weighed up sugar, biscuits, butter and the like — and knew something about the stuff. This was replaced by the system in which the customer took the stuff off the shelves, which meant that it had to be pre-packed and that brought in another thing called the Packaging Revolution. People who tear their nails trying to get at a packet of biscuits or cheese or whatever may be consoled to know that they are participating in a revolution. Except that the whole episode was a grievous misuse of the word

We mention this because, as the Eastern European dictatorships crumble away, the abuse of political terminology is reaching the scale of a feverish epidemic. In the Weekend Guardian of 16 June, for example, an article on the devastation wrought on the environment by industry in countries like Poland and East Germany was described as "Marxist-Leninist pollution". Leaving aside the fallacious linking of Marx's name with Lenin's — all too common — it is a fact that Marx did not condone the ghastly effects of capitalist industrial development, indeed he devoted a lot of effort to exposing it and to pointing out how it could and must be permanently eradicated.

In its frantic scramble to industrialise, to concentrate human labour power and to expand, developing capitalism has not been concerned about human interests. That is the story behind the slums and their diseased misery, the wrecking of the environment and the pollution of the air, earth and sea. It is the story behind the rush to industrialise in the Eastern bloc countries and the devastation it has brought. Politicians in the West pretend that it is socialism which is responsible for this and which has failed in Eastern Europe. To be charitable, we may assume they say this because they don't understand capitalism and even less socialism. Being rich doesn't save Lord McAlpine and David Sainsbury from being deluded, the working class doesn't have the same excuse, though

Ivan

The super-rich . . . (1993)

From the August 1993 issue of the Socialist Standard

In April the Sunday Times published its guide to Britain’s super-rich persons. The list comprised the top 400 wealth-owners with assets between them of some £55 billion, roughly equivalent to the amount of revenue that the government will receive from income tax this financial year. It was stressed that the list was based on estimates of minimum wealth and the actual assets of the flush four hundred are probably worth much more.

At the top of the list, not surprisingly, is the Queen, who as head of state is said to be worth some £5 billion, of which at least £450 million is her own personal wealth (this makes a mockery of the paltry sums raised for charity by her and her family in an attempt to justify their parasitic-status).

The survey then goes on to rattle off a roll-call of revenue-reapers (of whom 25 percent possess an aristocratic title), along with the business or industry with which they are mainly associated, until we arrive at the relative paupers at the bottom who have only managed to amass a trifling £20 million each.

The list includes not only the famous and infamous; far from it. As you might expect there are the Richard Bransons, the Dukes, the smattering of pop stars; but the majority of names would be completely unknown to those of us who don't regularly make killings on the stock market or mount the occasional take-over bid for a multi-national corporation. No, most of these super rich supremos wouldn’t even stand out in a crowd, and yet they control huge businesses and properties and yield influence over millions of lives.

Significantly, the top three wealth-owners after the Queen have amassed their fortunes through food production and distribution, proving that selling people something they must have in order to survive is highly lucrative and certainly not sacrosanct in capitalism’s thirst for the divine dollar. Of course, not all fortunes are made through business. Many are acquired through inheritance, kept in the family so to speak, much as workers inherit a life of exploitation and drudgery from their parents. Some 45 percent of those surveyed were born to their riches, and can look forward to obtaining further revenue via rent, interest and profits.

Assets race

In case you've been moved to rush to the sideboard to retrieve your investment portfolio in order to discover just how far you’re lagging behind in the assets race, it should be mentioned that some of our affluent tycoons have fallen on hard times and find themselves not quite so flush of late. For instance, spare a though for the embattled Duke of Westminster, who has seen the value of his assets fall from £3.5 billion to £1.5 billion since the bottom fell out of the property market. The Duke, who owns budget deficit-sized chunks of ultra-cache Mayfair in the heart of London, has also been clobbered by a recently introduced amendment to the leasehold law which means that tenants have the right to buy their freehold after 21 years. Despite this unforeseen "hardship”, the Duke hasn’t been dissuaded from splashing out on a £650,000 executive jet for commuting to London, but one does after all have to keep up appearances. Likewise, further down the table, poor old Cameron Mackintosh, a 46-year impressario, has seen the value of his theatre production company fall from £200 million to £60 million. Mackintosh has apparently not been prone to self-pity however, having paid himself a salary of £8.3 million in 1991.

However, the tale is not all of doom and gloom and some of our entrepreneurs have experienced substantial windfalls during the past year. Take the Sainsbury family (they of local supermarket fame); its members have seen the value of their empire increased by some £1 billion, without them having to lift a finger. Last November, half-year profits were up 19.4 percent to a staggering £391 million. So next

time you pop out to Sainsbury s to pick up a few essentials and find yourself dismayed by the size of the deficit in your pocket afterwards, take comfort in the knowledge that a good deal of the hard-earned cash you have to hand over every week just to cat is further enriching, amongst others, the Sainsbury folk.

Plutocracy

If you think that Britain's richest have rather more than their fair share of a very sumptuous cake, consider the fact that even the Queen ranks only fifth in the worldwide league table. In fact her fortune is dwarfed by that of the world’s wealthiest man. the Sultan of Brunei, whose oil-rich state has provided him with a tidy nest egg of $37 billion (£19 billion).

This tribute to Britain's under-worked and overprivileged plutocracy did not of course lake the form of a denouncement but was more of a celebration of the vast inequalities created by a property society. Despite several pages being devoted to honouring a mere 400 capitalists, who take no direct part in producing goods or services, not a single column inch was given over to the plight of the millions of workers (who actually produce everything) and their struggle to make ends meet week after week. But then producing an article listing the poorest members of society with total assets up to £55 billion would require several volumes and an inordinate degree of monetary exaggeration.

You’d think that by actually publishing this information the Sunday Times would be guilty of incitement to riot, or at least precipitating several angry letters to the editor. Not a bit of it; it’s a remarkable testament to capitalism's power to persuade and influence the majority of the working class that one of the mouth-pieces of the ruling class can openly boast about the inflated fortunes of its leading members without provoking mass outrage and calls for a fairer system of wealth distribution.The fact is of course that most workers actually believe that the current system, while perhaps, not entirely fair, is nevertheless immutable and that there is no viable alternative.

Socialists have no personal grudge against the people described above; when all the affectations and the airs and graces are stripped away they are just ordinary people like everyone else. It is however very important to recognise that it is the economic system known as capitalism which causes such disparity between the haves and the have-nots. It is the job of socialists to campaign for an alternative economic system under which each and everyone can partake of the wealth that this planet can yield and to persuade workers that things can be run differently, that is, not only in the interests of the few. Dare we even imagine a day when a future socialist equivalent of the Sunday Times may produce a special supplement entitled "Revealed: The World’s Wealthy”. More difficult to imagine is how you could fit into such a supplement the name of every person in the world . 

Nick Brunskill

Paying the Piper (1998)

From the October 1998 issue of the Socialist Standard

Roy Jenkins was a Labour Chancellor of the Exchequer who was fond of good food and fine wines and elegant houses but who was always ready to denounce us for any tendency towards what he saw as extravagance. So in between his visits to the posher restaurants and country homes he would threaten us about the consequences of wage rises above the miserly level set by him. This all went to build up his reputation as a brilliantly successful Chancellor.

His first attempt to get into parliament was in late 1944, when he was one of the two main contestants for the Labour candidacy in Aston, Birmingham. Jenkins lost—according to the successful contender this was because when they were at Birmingham for the selection Jenkins stayed at the Queens Hotel, which was famous for its extravagant chandeliers while the winner put up at the house of the local party secretary—a back-to-back house with an outside lavatory.

As far as Jenkins goes, the rest is history but we may wonder what became of that secretary. If he is still alive, has he kept his enthusiasm for the Labour Party, in spite of all he must have seen of their failure to change capitalism as they promised and the deceit they practised to justify that failure? If he is dead, what does he think of New Labour? Of the Blair dictatorship within the party? Of the grovelling toadies who have abandoned what they once called their principles in the hope of pleasing their leader? Does he turn in a back-to-back grave somewhere, at the knowledge of Blair’s wealthy cronies, people whose money has bought them an entry into Number Ten, perhaps a seat in the House of Lords, certainly favours for their investments?

Sponsors

An important element in the creation of New Labour was the move away from the unions, to re-assure the voters that never again would there be a Winter of Discontent. But of course this would leave a big hole in the party’s finances; they have been spending money at about £8 million a year and the last election cost them £13.7 million. This was where all those years of doing the Prawn Cocktail Circuit, of cosying up to City bigwigs, of ironing out the doubts of wealthy capitalists that Blair’s Labour would not look after their interests, paid off. That hole in the balance sheet has been substantially filled by cash from a large monied band of what are evasively known as sponsors.

Leading the way in these is Lord Levy, fundraiser supreme, who has induced all manner of industrialists, investors, entrepreneurs, pop stars and the like to cough up for Labour. Levy is himself a millionaire whose money was made in the music trade. Among the people he persuaded to “sponsor” the Labour Party was Lord Sainsbury—ennobled by Blair—who needs no introduction especially to the millions who trail through his supermarkets day-after-day under the impression that this is where Good Food Costs Less, even if it does contribute to the £411 million profit the firm made during the last half-year. The Sainsburys are said to be the richest family in the country, worth about £3,300 million. So they could easily afford their contribution to New Labour, estimated at £3 million over three years. The company have suddenly discovered, after all that time, that such gifts break their “ethical guidelines”-according to a spokesman ” . . . could easily be interpreted as a political donation . . .” as if it were ever possible to interpret them in any other way. So Sainsbury plc no longer give to the Labour Party.

Then there is the matter less well known Lakshanu Mittal, who is big in steel—like his father before him. Mittal is in the habit of buying steel mills all over the world; he is worth about £2,000 million which makes him about the third richest person in England. Another lesser known (for the present at any rate) donator is Robert Earl, who represents a lot that is most grisly about Blair’s Britain as he substantially owns a lot of restaurants including the Planet Hollywood chain. Earl’s wealth is put at $450 million; the £1 million he gave the Labour Party came in handy because it replaced the money the party had to return, shamefaced, to Bernie Ecclestone of tobacco-ads on Formula One cars fame.

Convert

Among the converts to Blair’s brand of Tory policies is Alan Sugar, who is now famous less as the founder of an electronics and computer empire than as the chairman of Tottenham Hotspur. Sugar has wide-ranging investments and is estimated to be worth £221 million; he is thought to have given £100,000 to New Labour. He was once a firm supporter of Margaret Thatcher, who is now a firm supporter of Tony Blair so we can see that Sugar has not really changed his view of politics; indeed he didn’t have to.

New Labour recently published a list of people and companies who had given them more than £5,000. There are 134 of them—pop stars, publishers, property tycoons, advertising people, industrialists. It is a fair bet that at the most a very small number of them gave their money because they thought this would help change society for the better. The rest—the people and firms who took a more realistic view, who knew what they were spending their money on—want to promote the Labour Party because they know that at present it is the party which best represents their interests in Britain. This means they know it is the party which best protects their wealth and their standing in society and which will keep up the system where one class lives a life of opulent chandeliers while the majority effectively makes do.

Ivan

Cooking the Books: Venture or vulture (2007)

The Cooking The Books column from the March 2007 issue of the Socialist Standard

According to the GMB and T&G unions, the Sainsbury supermarket chain is under threat. It’s reported that the Sainsbury family – including former Labour minister and Labour Party bank-roller, Lord Sainsbury – want to withdraw their capital and that  “venture capitalists” are grouping to buy them out. That’s what they call themselves. Others have different names for them. A GMB official called them “plunderers” while one from the T&G said they “do not create wealth; they extract it for their shareholders” (Times, February). A German minister once called them “locusts”. Other choice descriptions are “corporate raiders”, “predators”, “vultures” and “asset strippers”. 

Socialists apply some of these descriptions to all capitalists, but what have these particular kind of capitalists done to earn such epithets even from non-socialists?

Basically, they borrow money to set up a short-term fund (usually for 5 to 7 years) which they invest in other companies either to start them up or take them over. The venture capitalists then run the business  hoping to make enough money over the period to pay a higher than normal rate of interest to those who put up the money and to make a profit over and over this for themselves. Rates of up to 40 percent a year have been mentioned.

The immediate effect on the business they take over is that its indebtedness increases. Ordinary shareholders only have to be paid a dividend if the directors think enough profit is being made. Lenders have to be paid interest irrespective of whether or not the company makes a profit. Venture capitalists are in effect agents for lenders who take over running the company to ensure that these get their pound of flesh and over a relatively short period of time Then they move on to the next company.

It is easy to see why the unions don’t like this since the main means venture capitalists use to increase the short-term profits they are after is to hive off or close down the less profitable sections of the business with resultant job losses, so as to concentrate on the most profitable ones. The screws are then tightened on the remaining workforce to extract more work – and surplus value – from them than before.

The unions have promised an “ultimate showdown” with any venture capitalists that might assume control of Sainsbury’s. It is not evident that they have the industrial clout to organise and sustain the sort of strike this implies. More probably this is just a bluff to try to deter the venture capitalists from proceeding. The unions are also lobbying to end the tax concession on the money that venture capitalists borrow; in this they have the support of some ordinary capitalists who feel discriminated against when it comes to taking over other companies.

In the end, nothing much is likely to be done about “venture capitalism”. After all, from capitalism’s point of view, they are not doing anything wrong. In fact, they are only doing what comes naturally to capitalists: trying to make the biggest profit they can.

Big stamp wrangle (1964)

From the March 1964 issue of the Socialist Standard

The biggest battle for a long time is now being fought in the retail trade in this country—and all, on the surface, over a little piece of green, or pink, or gold, sticky paper called a Trading Stamp. Yes, on the surface. The real cause of the battle is to be found much deeper than any newspaper cares to dig.

Trading Stamps have been going in this country for a long time with Green Shield, a British company, having the big hold. But the stamps were mainly confined to small shops; they had no really big retail organisation to issue them. What started the present fuss was the decision of millionaire Garfield Weston (ABC, Fine Fare Supermarkets) to issue the American Sperry and Hutchinson pink stamps in his supermarkets.

This started a flood of stamps, among them another American concern — King Korn — and another British Super Yellow, owned by the same John Bloom who has made a lot of money out of direct selling washing machines. One gimmick followed another — Mr. Weston, for example, had glamorous pink-coated hostesses outside his supermarkets dishing out the S.H. gift catalogue.

Sperry and Hutchinson have been going for a long time—since 1896, to be exact, and have been in England, looking for an outlet, for over a year. They claim forty per cent. of the £300 million trade done in 275,000 retail shops in the States and have 280 redemption shops where their stamps can be exchanged for what are called gifts. The man behind them is Mr. William Sperry Beinecke, who says that trading stamps are no panacea for the retailer but only a promotional tool to help his sales.

Ranged against the stamp firms are some of Britain's retail giants Boots, W. H. Smith, Sainsburys, and so on. Labour peer Sainsbury, who has hundreds of shops, is spending some £50,000 in a campaign to thwart the trading stamp firms. Sainsbury opposes the stamps because, he says, they are wasteful and in the end lead to higher prices. And, of course, because they are "unfair competition.” He is doing his best to persuade the Labour Party to make the matter one for legislation.

On the side of the big retailers in the battle is the shopworkers’ union— USDAW, whose executive committee, in the name of their 350,000 members, say that trading stamps are against the interests of shops and stores, employees and consumers and that in the end the nation (by which they mean you and me) will bear the added burden of the cost of the stamps and gifts and the labour involved in producing and checking them.

Mr. Garfield Weston, for his part, protests that he would not do anything which was against the public interest and so is determined to carry on his sales drive with what he hopes will be the help of the stamps.

The printing and distribution of hundreds of thousands of gift catalogues alone costs at least £2 million; it is this sort of cost which Lord Sainsbury says will be passed on to the customer. The Progressive Grocer Magazine figures that trading stamp amount to fourteen per cent, of a retailer's operating costs and that he has to take this into account when setting his prices.

Frank L Chavia in his book Supermarkets, published in 1961, writes:

  “Selling Operations". Stamps are generally at the rate of one stamp for each 10 cent purchase. For a supermarket to use this promotional tool successfully certain prerequisites must be met.

1. The (user) shop should be part of a group of different stores reasonably close to each other geographically. All should handle the same stamp with the super or a departmental store as the centre of influence.
2. Stamps are promotional: customers must be encouraged to save them and associate the stamps with that particular store.
3. Stamps must obtain and hold additional volume, while the volume increase varies; at least 10% increase in sales is needed to break even on the stamp cost.
4. The super must be able to handle added volume without materially increasing the overheads.
5. Stamps are not a panacea for supers whose quality and type of service are inferior to those offered by competitors.
6. Stamps do not permit much if any, independence in pricing.

Now it is obvious that the retailers who have taken up the stamps have not done so, so that they can give the housewife a brand new set of saucepans or any of the other “gifts.” They hope and expect to increase their profits through the stamps and this need not come about by a simple rise in their prices. What they say they are aiming at is to increase their turnover and by this means to increase their profit. One of the stamp companies’ press adverts claims that, in retaliation, some anti-stamp retailers have had to cut prices and that therefore the ultimate winner in the struggle is the consumer. In this sort of advert it is always the consumer—and never the shareholder—who wins.

In fact, trading stamps, like the checks, coupons, premiums, samples, contests which have all been well tried in the past are part of the jungle of capitalism's competition. And competition will only bring prices down when there is an overall excess of the supply of a commodity over the demand for it. The fierce competition between the grocery retailers did not, for example, prevent the increase in the price of sugar last year.

The process of profit making is basically quite simple. The capitalist class, who own the places and the materials which go to produce and distribute wealth employ the working class. The labour of the working class produces the wealth; it builds the shops, produces the groceries, transports them. The workers serve in the shops, they take the cash at the counters. In this process they are exploited simply because, in terms of a commodity’s value, they contribute more than they get back in wages. When their labour is done the commodity they have made or handled has a higher value than it had before. It is from this higher value that the employer—the industrialist, the retailer perhaps—gets his profit.

This profit often has to be shared with other capitalist concerns—with advertising agencies, insurance companies, banks, landlords. And sometimes with a “gimmick” concern like the trading stamp companies. In the competitive rat race the capitalists get headaches, and worse, in trying to outwit and outsell each other. Some retailers may try simple low prices—like Salisburys and Boots. Others may fall for the wiles of the stamp trading companies. In this they are creaming off some of their profit, sometimes in the hope of making a larger overall profit—and sometimes merely to survive.

The working class are as passionately divided in this struggle as are the competing retailers. Some of them like the stamps—they like sticking them in, they get a kick out of their “free gift.” Other workers think that the stamps are a dishonest gimmick. Yet if they will all take a deep breath and have a good think about it, what would they find? Why. that whether they collect stamps or not, and whether prices go up or down, they still only just manage to get by on their wage. When they have paid the landlord and the grocer and the H.P. man, when they have put a bit by for their holiday, and when they have paid for all the other necessities of life, there is precious little left.

As long as the working class are deluded by the gimmicks of capitalism—in all their many shapes and sorts—there will be no end to them. Perhaps some enterprising firm will try white balloons next. For saving so many white balloons you can get so many black stamps which you can exchange for so many pink discs which you can swop for . . . and so on, and so on, until they get wise to it, and it dawns on them that a better, saner way of making and distributing humanity's wealth is so that it is strictly for use instead of for sale and letting all human beings have free access to it.

Joe McGuinness

A Good Old Family Business (1974)

From the February 1974 issue of the Socialist Standard

Sainsbury’s is a famous chain of grocers’ shops. Last year, after a lifetime of family management, they became a public company. The change was half-bewailed; put down to “progress” but signalling the end of old-fashioned shops where every woman was Madam and the assistants weighed things out. Their shops now are on the supermarket plan, where trolleys are wheeled down stacked-up avenues of tins to conveyor-belt checkout desks.

Sainsbury’s were paternalistic shops, full of cleanliness and service. How easy it is to lament the passing of all that, as if it were a golden age! The “niceness” for the customers was accompanied by low wages, and obtained by a regime of petty and not-so-petty tyrannies and humiliations. To work for Sainsbury’s was to be a slave. I know.

★

I was employed as a porter, quartered in the warehouse behind the shop. The porter’s job was to hump things and clean things, and at the outbreak of war the wage was thirty shillings a week. They made a fuss about employing you. There was an interview at the head office: references, good character, honesty and industriousness were essential. Once engaged, you were addressed by surname only like a soldier, and like a soldier called your superiors “Sir”.

The porter’s day began with sweeping the floors and washing the windows, and ended with scrubbing the long mosaic shop-floor. There was a daily schedule for cleaning — marble fascia, metal rails, the butchers’ blocks, the brass weights, the lavatories. To the warehouse walls were fixed enamel plates with paternal proverbs on them: A Place for Everything and Everything in its Place—J. Sainsbury; The Man Without a Cheerful Face Shouldn't Run a Shop—J. Sainsbury : as might be seen elsewhere All Hope Abandon Ye Who Enter Here.

The cleaning schedule in practice was carried on between the humping. Vans of groceries and meat arrived every day to be unloaded and their contents stacked and hung. But besides them there was the daylong carrying into the shop. Sainsbury’s did not let the assistants leave the counter, for fear they should do so with something from the till. As they wanted fresh supplies, they bawled towards the warehouse: Side of bacon ! Cheese ! Box of butter ! — and the porter entered like an extra in an ill- rehearsed play, burden on his shoulder and the manager behind exhorting him to hurry.

The porter wore a blue-striped coat like a convict’s, and the manager a dark jacket with a snow-white apron. Everyone else wore a white tunic and a long white apron. In that uniform, however, a hierarchy was shown. The “first hand”, the leading assistant, had red buttons on his tunic. The others’ buttons were black with numbers marking their standing in order. Only the juveniles had no numbers, signifying that they were nobodys at all.

★

The discipline was stringent. White collars and black shoes were compulsory, hair had to be short- back-and-sides. The highest virtue was to be “quick”; all were urged obsessively into a brisk demeanour and scurrying movements. Mistakes were unforgivable. Sainsbury’s employed “samplers”, people who went in shops anonymously to buy and look out for inaccurate weighing and other errors; assistants could be carpeted and sacked without being able to identify or contest the complaints against them.

Everyone was sent to the firm’s headquarters for training. There were courses in grocery, butchering, poultry-trussing, etc. On the course — usually a month — the trainees were lined-up for inspection by a head man, often one of the Sainsburys, every morning. Personal appearance was scrutinized, and the most dreadful condemnation was: “That’s not Sainsbury.” The courses were for conditioning as much as for teaching the trade. Assistants learned moronic jingles to chant as they knocked up the customers’ butter: “This is the shop, Built upon a rock.”

There was a voluntary superannuation fund, and at Christmas a double week’s wages was given. That week, the bike-boy had twenty-five shillings instead of twelve-and-six, the manager sixteen pounds instead of eight. After the war began this bounty was replaced by what might be seen as the acme of unwelcome paternalism. Employees were advised that because of wartime conditions the double wage could not be pursued; instead, every single one would receive what he would undoubtedly appreciate just as much — a signed picture of Mr. Sainsbury.

Why did people stand for it: the regimentation and conditioning, the skinflint pay, the contemptuous pretence of benevolence? The answer, of course, is unemployment and the fear of it. Sainsburys’ empire was founded on young men having to hunt and be grateful for whatever job they could get.

★

The abiding terror of all Sainsbury shops was “short stocks”. At the regular stocktaking every penny had to be accounted for, every empty carton and cracked egg. If it was not and a deficiency was shown, the shop took stock every Saturday until the cause was found. It might be inefficiency or waste, or it might be somebody pilfering. Whatever it was, it brought everyone under suspicion.

Ultimately, the manager might lose his job and be relegated to an assistant in some distant branch. So the manager hunted a culprit; if he became desperate, traps could be laid. The manager and his supervisor interviewed assistants, asking if they smoked or went to the greyhounds and how they could afford it on what they were paid. The search was facilitated by the fact that many assistants “lived in”, in accommodation provided over Sainsbury’s shops.

Curiously enough, systematic pilferers were seldom found out. I kept the egg-boy’s secret as to his method, when the management were frantic. Sainsbury’s wanted young men who “could use their brains”; perhaps they got, in this connection, what they were asking for. 

It was not all that long ago. Some of the brisk young men of my own generation are still in Sainsbury’s shops. That kind of training commonly qualifies people to do nothing else, so they are condemned until retirement brings merciful release of a kind. It has been possible also to observe the progress of Sainsbury himself, the “Mr. Alan’ who inspected us and sent everyone his picture for Christmas. He was made a Labour Party Lord: a putative friend of the working class who feels strongly, no doubt about social injustice.

This is the commerce of capitalism. The necessities of life are produced as commodities to be sold at a profit, and fortunes are made in their distribution. The multiple store which presents itself as a nice old-fashioned family business has exactly the same objective as the huckstering new one; both can live only by the exploitation of the workers who produce and distribute. It is a system we shall do well to get rid of.

Robert Barltrop