Finance and Industry: The experts are fallible (1962)

The Finance and Industry Column from the July 1962 issue of the Socialist Standard

The experts are fallible

The economic experts of capitalism—the City Editors, the economists, the financial seers—sit on something of a pedestal. Whatever twists and turns the economy may take, they are never caught without a remedy. Their readers, political parties, even governments, hang upon their words.

Which makes it very embarrassing for everybody, if the experts are shown to be as fallible as the rest.

Mr. Samuel Brittan is the Economic Editor of The Observer and last year, like all men in his position, he was expected to comment on the Selwyn Lloyd “pay pause” Budget. This is what he wrote, on September 3rd last:

I have a feeling that Mr. Selwyn Lloyd is going to surprise many people by his success in carrying out his economic policies . . . many of the people who are now most vociferous in denouncing him may be loudest in his praise a year from now.

Mr. Brittan went on to point out that in some ways the Lloyd policy was following behind events and then gave his reasons for thinking that ". . . Mr. Lloyd has been so much luckier than his predecessors . . ." 

Now—almost a year after—what does Mr. Brittan think of the Lloyd policies? Is he loud in his praise? He is not. He has been doing his homework in The Economist and has been impressed by an article in the 12th May issue of that weekly which drew some striking comparisons between the Lloyd squeeze, and what has followed it, and the Butler squeeze of 1957 and what followed that. This is what Mr. Brittan wrote in The Observer of 10th June this year:

On both occasions the same kind of arguments have led to the same mistakes. Mr. Selwyn Lloyd too often gives the impression of believing that history began in July, 1961, and has not devoted enough time to studying the mistakes of his predecessors.

And later in the same article:

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

If Mr. Brittan was wrong, a year ago, when he expected the Lloyd policies would be lucky enough to succeed, he could of course equally be wrong now that he is criticising the Chancellor. Capitalism is a baffling system which can catch out the experts. But if that is going to happen, there is no point in basing experts, is there?

By a few shares

A new campaign is announced by the Wider Share Ownership Committee, aimed as its name suggests to encourage more people to buy shares. It would seem to have timed its effort rather badly. After the recent Wall Street debacle we would imagine that many a small investor has gone back to his account in the Savings Bank or the old sock under the bed.

The number of shareholders in the U.K. has apparently increased over the past ten years from about a million to 3½ million. Much of this increase is presumably accounted for by firms like ICI distributing shares to their workers and to lots of small men being persuaded on to the stock exchange band-wagon by tales that capitalist inflation and prosperity were here to stay.

It will be interesting to see what success the campaign has and we hope the Committee will oblige us in due course with details of the number of shareholders in say six or twelve months time. They should make interesting reading, especially if there have been a few more stock exchange shocks in the interim.

At the same time, an analysis of how many hold how much would be useful as well as instructive. We have an idea that the greater part of those 3½  millions hardly matter when it comes to working out who really own stocks and shares.

Do they know?

Our editorial this month deals with the recent stock exchange shake-ups and makes the point that they basically reflect the general unease amongst capitalists concerning present economic prospects.

This unease has spread to most sectors of the economy and is obviously causing our politicians and their advisers some real headaches. Nor, in spite of the long words they like to use and their knowing looks, do they seem to have much idea of what to do about it all.

For example, hardly had Mr. Selwyn Lloyd finished warning us that he might have to lake fresh steps to tighten up demand than he calmly goes and cuts the minimum H.P. deposit from 20 to 10 per cent. Only a little while before, he had eased some of the restrictions on the banks. When it is remembered that he was apparently worried only a few weeks ago about a hire purchase boom, it all seems rather strange.

Some cynics have tried to explain the quick turn round as a by-election gimmick to help the Tories in their present political troubles. Perhaps so. But we have the shrewd suspicion that it only requires capitalism to go into the faintest suggestion of a spin for all the politicians and their economic experts to lose their balance. To be quite frank, we don't think really they have a clue.

The Gold Rush

One further thing we have heard for several years past from our experts is that with the new theories about money, credit, and the general control over capitalism, the importance of gold has become a thing of the past. Some of them have even gone so far as to regard it as a myth, a hoax that has been shown for what it really is by the new economic theory.

Unfortunately, our capitalists only seem to think there may be something in these theories when there is little chance of their being put to the test. Immediately things begin to get uncertain, they forget all about the theories and rush us quickly as they can into gold. Which explains the present sudden interest in gold mining shares and the heavy buying of the metal itself.

This is the classic way the capitalists have always acted in times of stress. Not currency, not stocks and shares; but lovely, shiny, golden, gold. As for economic theory, they will come back to that after the crisis has blown over.

Karl Marx, over a hundred years ago, would have found it a quite natural thing for the capitalists to do. He for one was under no delusion about the importance of gold to the capitalist system. The universal equivalent he called it, and universal equivalent it still is.

Stan Hampson

Right honourable gentlemen (1978)

From the September 1978 issue of the Socialist Standard

Anyone who spends an afternoon observing Members of Parliament, after prolonged and copious lunches, reeling about their business in the House of Commons, may be surprised to learn that those same Members are expected to conform to what are called Standards of Behaviour. It was a failure to keep to these standards which finished off John Profumo and John Stonehouse and which will, if he is convicted of conspiring to have Norman Scott murdered, also end the political career of Jeremy Thorpe.

It is necessary to exercise a great deal of caution in this matter because (although this will be no comfort to Thorpe) not all politicians who plan to kill people are automatically drummed out of that experience known as Public Life. In fact there are many — some of them hold down jobs in one or other branch of the Ministry of Defence — who are paid fairly high wages to do exactly that. But there are guidelines, outside of which it is not permissible for a politician to stray; within them he can lie and cheat and organise mass killings and, if he keeps it up long enough, expect to end his days in the House of Lords with a few directorships to buoy up his income. Outside them he may end up in the dock.

These are customary demands of a political career and some of the people subject to them adapt more easily than do others. Most governments include one or two ministers whose single-minded devotion to an odious duty, whose readiness to carry out any dirty work which their dogged loyalty to capitalism persuades them is necessary, marks them out as being of abnormal ambition. They usually accumulate a few honours at the end of their days and richly deserve every one of them.

One such was Selwyn Lloyd, who died recently. Lloyd, who looked everyone’s vision of a stiff-necked bank clerk, was so drab it was almost exciting — he had, in fact, been a barrister and we can only hope he was able to present a more optimistic image to his clients. Moshe Dayan, when he was the Israeli Commander-in-Chief, wrote of him that he

. . . may well have been a friendly man, pleasant, charming, amiable. If so, he showed near genius in concealing these virtues.

Beneath his pin stripes, Lloyd nurtured a steely fidelity to British capitalism, in whose cause he was always ready to conspire and to deceive and to organise enterprises likely to result in the death of a lot of other people. One of the historical episodes in his career, for which he will always be notorious, was the 1956 British and French invasion of the Suez Canal Zone. That invasion provoked a storm of opposition, some of which was fuelled by evidence that the British, French and Israeli governments had hatched a plot to provide justification for the attack. The plot, in the words of Anthony Nutting, who was Minister of State at the Foreign Office at the time,

. . . was that Israel should be invited to attack Egypt across the Sinai Peninsular and that France and Britain, having given the Israeli forces enough time to seize all or most of Sinai, should then order ‘both sides’ to withdraw their forces from the Suez Canal, in order to permit an Anglo-French force to intervene and occupy the Canal on the pretext of saving it from damage by fighting. Thus the two powers would be able to claim to be ‘separating the combatants 'and ‘extinguishing a danger- out fire’, while actually seizing control of the entire waterway and of its terminal ports, Port Said and Suez. (No End of a Lesson.)

At the time Selwyn Lloyd, and the British government, steadfastly denied the existence of any such arrangement. On October 30 1956, the day the Israeli forces started their attack, the then Prime Minister Anthony Eden told the House of Commons that it had come as a complete surprise to Whitehall. The next day Lloyd backed up this denial with the slippery answer to a question in the House of Commons about collusion:

It is quite wrong to state that Israel was incited to this action by Her Majesty’s Government. There was no prior agreement between us about it.

On November 2 1956 General Keightley, who was in command of the British forces in the Suez landings, told journalists that “There has never been any contact between Israel and the Allies". (Secrets of Suez — Merry and Serge Bromberger).

Well that was a long time ago and now that the dust of Suez has settled there is an abundance of admitted evidence that Eden, Lloyd, Keightley and the rest were simply lying when they denied any pre-knowledge of the Israeli attack. In fact Selwyn Lloyd himself later gave an account of the affair which, describing a secret meeting at Chequers when the French general Challe and the acting French Foreign Minister Gazier outlined a plan to invite Israel to invade the Sinai peninsular, exposed himself as a liar. According to Anthony Nutting, who was also at Chequers that day, Eden was at once in favour of the suggestion and Lloyd later backed him up in this. That meeting took place on October 14 1956 — over a fortnight before Eden, Lloyd and Keightley were denying, as honourable men should, any collusive encouragement of an Israeli military action against Egypt. A week after the Chequers meeting Selwyn Lloyd was sent incognito to France to discuss the plot with, among others, the Israeli Prime Minister Ben Gurion and General Dayan.

The subsequent invasion of the Suez Canal Zone broke no less than three agreements which the British government was signatory to. There was the United Nations Charter, of which so much nonsense was talked; there was the Tripartite Declaration of 1950 (in which Britain, France and the USA made themselves responsible for preventing either side starting another round in the Arab/Israeli conflict); and there was the 1954 Anglo-Egyptian Treaty which bound Britain to send troops to the Suez Canal only if asked to do so by the Egyptian government. When these kinds of agreements are signed they are presented to us as great peace-keeping measures; Suez showed again just how little such assurances are worth.

In spite of the evidence that the Suez invasion was a typically disreputable episode, Selwyn Lloyd stubbornly defended it all as necessary and honourable. He cheated, he lied and he conspired in something which he knew would end in the killing of a lot of members of the working class. That, of course, was his job as Foreign Secretary. His reward, after the collapse of the Eden government and the appointment of Harold MacMillan as Prime Minister, was first to keep his place as Foreign Secretary (when he might well have been expected to lose it, as one so closely associated with Suez) and later to get the equally important job of Chancellor of the Exchequer where, it may have been expected, his dreary cynicism was likely to have a depressing effect on workers’ wage demands. MacMillan seemed at first to admire him greatly:

Selwyn Lloyd . . . had both the experience and the intelligence, also, I believed, the political agility to undertake a new task. (Pointing the Way — Harold Macmillan.)

This admiration persisted through several crises (“. . . the Chancellor of the Exchequer in capital form . . “. . . Selwyn Lloyd has been splendid all through. He has been calm and confident.”).

But as the storm clouds over British capitalism refused to be dispersed by Lloyd’s stolidly uninspiring policies, MacMillan became abruptly disenchanted with his dog-like Chancellor. (“ He seemed in some distress about wage claims . . ‘‘Selwyn . . . seems to me to have lost his grip . . . Lately, he seems hardly to function in some vital matters — eg this Incomes Policy affair.”) (At the End of the Day — Harold Macmillan.).

The government’s difficulties with the economic crisis were aggravated by a series of bad by-election results and, in a panic to give the cabinet a facelift, Macmillan decided to sacrifice several ministers, including Selwyn Lloyd. Even at so crushing a moment, when he might have shown some anger, Lloyd remained as stiff-necked as ever; he refused a peerage because, he said, he wanted to stay in the Commons to defend his financial policies and he wrote to Macmillan:

Dear Prime Minister, You have told me that you would like me to resign and this I willingly do.

Lloyd’s dismissal caused some wrath in the Conservative Party, where it was obviously thought that anyone who could be so utterly relied upon to do any dirty work deserved better. His old boss, Anthony Eden (who was by then savouring his reward for the Suez bungle in the House of Lords) made a rare return to political matters to say that Selwyn Lloyd had been ‘harshly treated’.

Lloyd seemed to be the only one not to be complaining. He came back briefly, as Lord Privy Seal and Leader of the House, until the Tories were beaten in 1964. In 1970 he was elected Speaker, which to some extent took him out of the political battle and gave him a job in which he clearly upheld all the traditions of the House (which, when an MP says it, is taken as the highest compliment although it may not be clear which tradition he is referring to) until 1976 when he was made a Life Peer. At one time or another Selwyn Lloyd was a director of, among other companies, Sun Alliance and the Rank Organisation.

His was an iniquitous story, although unexceptional. The leaders of capitalism pose as people who are concerned about human interests and who, because they wield considerable power, are anxious to conform to the highest standards of honesty. On this image they ride in and out of power; each time a worker votes for them it is a demonstration of confidence in them to keep to their promises and to live up to their image.

Reality is a lot more sordid. Capitalism can only work against the interests of a majority of its people. At the same time it is a chaos of conflicting interests — of one firm against another, or one combine or international alliance against the rest. Harmony, cooperation, plenty — these are concepts utterly foreign to the priorities of this social system.

By the same token capitalism cannot work on freedom or honesty. Secrecy, deception, double-dealing are essential to its operation. Very few firms can be open about their production and marketing plans and it is common for them to keep secret important matters which it is in their customers’ interests to be aware of — for example the standard of testing of thalidomide. Then imagine a Prime Minister who openly admitted the truth — that his policies were designed to protect the interests of the ruling class minority against those of the majority, and that he intended to hood wink that majority into voting for their own robbery and humiliation.

The more customary, because less disruptive, way is that of Selwyn Lloyd, to maintain an image of bland respectability behind which to behave like a Sicilian bandit. At times the ruling class may lift the veil on the deception, to allow the workers to see a little of how they have been misled — but this only shows with what contempt the ruling class regard the people off whose backs they live.

It is not that capitalism would be better if its leaders were consistently honourable. The point is that we live under a social system in which cheating, lying and murder are a natural currency. Capitalism could not survive on any other terms. It is a measure of its boundless cynicism, that its Right Honourable Gentlemen are anything but that.

Ivan

Who is in Charge? (1962)

From the June 1962 issue of the Socialist Standard

The government is now well past its halfway mark and soon it must start thinking about the timing of the next general election. Whatever date it decides on, we may be sure that it will be the result of a careful calculation. A time like the present, with bye-elections running against it and with signs of internal strain, is not likely to be chosen. Mr. Macmillan—if he is still Prime Minister—will try to wait until he can feel surer of victory. This does not mean that he will leave it until the last minute, which would give him little room for manoeuvre. It does mean that, as in the past, the next election will almost certainly be held some time before the government’s term expires in October, 1964. This time next year, then, the decision may not be far off.

Whenever they are called upon to vote, the workers in this country will display all the bemused docility which we have grown accustomed to. They will concentrate on the wrong issues, at the wrong time. They will allow themselves to be misled by the government’s claim to have been a sage, responsible administration and by the clamour from the opposition parties that they are the men to put fire into the belly of British capitalism. The workers will not pause to consider the futility of it all and to compare the anomalies of Capitalism with the obvious impotence of the political parties to deal a with them. As a whole, they will not even toy with the idea that it might be a good thing to abolish Capitalism and to have Socialism instead.

We can say all this with some confidence, because experience has taught us that the working class prefer to take Capitalism on trust to what must be the painful business of thinking and remembering and comparing. The election policies of the Tories, the Labour Party and the others always amount to a claim that they are able to control Capitalism. As each of Capitalism’s crises blows up, there is no lack of political leaders to make speeches which state their solution to it. City Editors are prolific with schemes which put the politicians straight. Nobody seems to notice that some of the schemes are not very different from those which are being blamed for producing the crisis in the first place and that some of the bright ideas contradict others which have been offered before as the solution to our problems.

Let us, for example, consider the recent reversal of the government’s policies of last July, when Selwyn Lloyd pushed through his emergency Budget. The main provisions of that Budget were the increase of Bank Rate to seven per cent., the increase of some taxes by ten per cent. of the previous rate and the imposition of the pay pause. These policies were necessary, said the government, because we had all been living too well. The working class forgot to ask themselves when Capitalism had ever allowed them to live anywhere near as well as some of the people who make speeches about the Budget. They grumbled a little about it, but in the main meekly accepted it. The Budget was sold to them as essential to save British Capitalism—and there is no higher task to which a British worker can feel himself called.

Since then, apparently, British Capitalism has been saved, because the emergency Budget has gone. Bank Rate has come down steadily until now it is lower than it was last July. The pay pause, formally at any rate, is finished; workers who ask for higher wages have some other reason given to them for the employers' resistance to their claim. The ten per cent. increase in taxes has been dropped; some taxes, in fact, have been even further reduced. The entire tax structure has been somewhat simplified, which may be a clue to a new theory hatching in the Treasury—that British Capitalism would work better if it imposed a uniform sales tax upon its Capitalist class instead of the various purchase taxes which apply at present. There is, of course, no evidence to support this theory and in any case it has nothing to do with working class interests. But never mind; the experts at the Treasury must cultivate restless minds to keep up with Capitalism and it all makes good copy for the election programmes.

Perhaps the experts would feel more confident about the effectiveness of their remedies if they could all agree on them. But this they cannot do — is it any wonder then that mere inexpert Socialists should have so little confidence in them? Each time a Chancellor slaps restrictions on — or takes them off — the economy, there is a chorus of dissentients who assure us that he is too late or too early, too bold or too timid, or just plain wrong. In July, 1960, for example, the government reverted to the sort of credit restrictions which they have been imposing for years, on and off. This was met with anything but unanimous applause. The Guardian commented on July 5th, 1960:

  The past week has brought fresh support for those who questioned the need for the Chancellor's latest round of credit restrictions. The Board of Trade's admission that hire purchase sales in May dropped below last year's level simply confirms the view, expressed by many manufacturers and traders, that the boom in demand for consumer durable goods had already slackened off . . . the Government ought to have been congratulating itself on achieving a desirable new balance in the economy, rather than imposing new restrictions.

Newspapers, of course, need only comment upon the muddle which political parties get themselves into when they try to run Capitalism. Happily for the press, they do not have to involve themselves in trying to sort out the muddle. Even so, newspapers may sometimes hit upon the basic features of a crisis. There is an obvious question which is provoked by the continual upsets which Capitalism's economy is heir to, and by the contradictory policies which are put forward to settle these upsets. Do the politicians, the economists and the Chancellors control the economy? Or does the economy control them? As we have seen, The Guardian thought that the Chancellor in 1960 was trailing a long way behind events. And this is what Samuel Brittan, the Economic Editor of The Observer — who thought the pay pause was a good idea — wrote on September 3rd, 1961, about the effect of the Lloyd policy:

  The Government's hand will be enormously strengthened in the coming months by a marked change of trend in the labour market, which actually began as early as June . . . unemployment has since been creeping up and unfilled vacancies have been declining . . . labour should become a good deal easier to obtain in the coming months.
  At the same time manufacturers will find orders on the domestic market fewer and further between; and with profit margins under pressure they will offer fiercer resistance to wage claims . . . All this was without Selwyn Lloyd, who has administered a cold douche to an economy that was probably already coming off the boil even without his efforts.

Current Trends
What this means is that the Chancellor's policies are only a desperate attempt lo straighten some of the wilder zig-zags of Capitalism. They do not run counter to the current trends in the economy; they do not try to deflate a boom, nor to shake out a slump. They do not, in fact, have any considerable effect upon economic conditions, but only reflect those conditions, usually some time after they have passed by. Samuel Brittan's rival — Mr. Rees-Mogg, the Political and Economic Editor of The Sunday Times — summed it up for us all on July 30th, 1961: “. . . what Mr. Selwyn Lloyd has produced is not a policy, it is a reaction.”

We can now consider the conditions which make the Chancellor's policies for him. Two of the industries which The Guardian mentioned as being in difficulties were those making cars and domestic appliances. These were among the industries which cashed in on the post war boom; they built great factories, often in old depressed areas of the country. They invested tens of millions of pounds in their productive machine and up to a few years ago this all seemed to be paying off. They were riding high. Times have changed since then. The motor car firms have suffered violent ups and downs some of them have gone altogether and others are sickly plants.

Similar conditions have hit the domestic appliance trade. A. J. Flatley, a washing machine, drier and refrigerator firm which suddenly sprang up in Manchester a few years ago, to expand at great speed, has recently gone bankrupt. Hoovers are busily cutting their cloth to suit a severely restricted coat—last year they took a fifty per cent. cut in their profits. Hotpoint—part of the mighty Associated Electrical Industries—have recently reduced their washing machine prices to catch sales in a hardening market. We all know what has happened to the price of refrigerators over the past few years, and to some of the firms which make them.

Now why does this happen, to these industries and to others? In August, 1960, the Economic Review, published by the National Institute of Economic and Social Research, drew attention to what it called the “over capacity” of the durable consumer industries. This “over capacity” was largely the result of the enormous investment which was placed when consumer durables were booming. When the boom slackened the extra productive power became an embarrassment—stocks of machines accumulated, production had to be cut and workers laid off. That is the immediate, at any rate, explanation of a slump.

The fundamental explanation goes deeper. What could the consumer durable firms have done to avert the decline? Should they have held off their investment when the boom was going strong? Of course, they could not. At the time, intense investment was not merely a good idea, it was an absolute must for a company which wanted to get its share of the market. Could they then have correctly gauged the market, foreseen how long it would hold and so forecast the slump? This is something they have never been able to do, nor ever will be able to. The Capitalist class train up expensive experts and economists, but still they are caught napping by the disappearance of a market.

For Capitalism's slumps, like its booms, happen because its wealth — whether it is motor cars, washing machines or anything else — is made to be sold. This means that the market is the key to Capitalism's fortunes. And the market is a capricious, unpredictable, anarchic thing. It sums up Capitalism, that its fortunes should rest in such uncertainty.

So we know that as fast as one policy is knocked from under him, the Chancellor must come up with another. They all will be equally ineffective, but that will not stop him groping for another palliative, another stopgap, another lame horse to sell to the working class. Rees-Mogg put it bluntly in his article when he said, “The Chancellor is not in charge of the economic machine: it is in charge of him.”

Sadly, this will almost certainly pass the working class by, when the next election gets under way. Then there will be many lame horses on display at capitalism’s political market place. The voter, will prod them over, examine their mangy hides and finally plump for one or the other. A depressing prospect? For humanity, yes. But for those who pocket the proceeds, no.

Ivan

50 Years Ago: Little Budget (2011)

The 50 Years Ago column from the September 2011 issue of the Socialist Standard

Many big-time financial editors applauded Mr. Selwyn Lloyd’s second attempt at producing a Budget for 1961/2. Here, they said, was the strong medicine which was needed to sort out our troubles once and for all.

This was the sort of comment which greeted Mr. Butler’s autumn Budget in 1957, when Bank Rate last went up to seven per cent. It is what is always being said about the so-called remedies for the economic and financial crises of capitalism.

The trouble this time, said Fleet Street, is that we are all living too well. Agricultural workers, who are getting by on an average wage of £10 11s. a week and local government employees who are somehow making do on an average of £10 16s a week, must have been very surprised to hear that nowadays their life is one long spree of opulence.

Whatever measures successive Chancellors may impose, the economy keeps on staggering from boom to recession, from expansion to retrenchment. One budget (often at election time) knocks a couple of pennies off beer, a couple of shillings off income tax. Another puts them back on, or onto something else.

The workers end up where they started, with a personal budget which is very finely balanced, often on a tight-rope supplied by the hire purchase companies. Yet they keep their faith with capitalism — if they blame anything, it is the planners, or their plans. But capitalism — unplannable, chaotic, unbudgetable — is always doing its best to teach them better.

(from News in Review, Socialist Standard, September 1961)

50 Years Ago: Fair Play for Teachers (2011)

The 50 Years Ago column from the October 2011 issue of the Socialist Standard

How many schoolteachers have spent how much time telling how many classes that an Englishman’s word is his bond, and that the road to happiness is paved with honesty and truthfulness?

Anybody who took this seriously must have been shocked by the recent government decisions to ignore the recommendations of the Civil Service Arbitration Tribunal, to restrict the statutory Wage Councils and virtually to destroy the Burnham Committee. And all this from an upstanding Englishman like Mr Selwyn Lloyd!

In fact, the teachers are wasting their time if they are pining for fair play, for there is no such thing in the class war. The Ministry of Education, for example, took over the Burnham Committee’s functions because the government decided that the committee was being too generous to the teachers.

This makes no sense if we are looking for fair play. But in terms of the conflict of interest between any employer and his employees, it makes very good sense indeed. Teachers as a whole, like many civil servants and other white collar workers have always denied the existence of the class struggle. But it exists for them just as much as for the miner and the docker.

That is one of the things Mr. Selwyn Lloyd seems to be doing his best to teach them. Let us hope they turn out to be bright, receptive pupils.

(from News in Review, Socialist Standard, October 1961)

News in Review: Bomb Tests (1961)

The News in Review column from the October 1961 issue of the Socialist Standard

Bomb Tests

Have we grown accustomed to humbug? There was enough of it to be had, when Moscow announced the resumption of nuclear tests. The Russians said that it was all America's fault they had to let off their bombs to show that they were ready to defend themselves against Western imperialism.

Washington and London professed shocked dismay, and anxiety for the future of the human race. To hear them, a simple soul could have been excused for assuming that neither Britain nor America had ever tested a bomb, and that the Americans were not all ready to go on their own tests as soon as they got the excuse.

In fact, there was a lot of military pressure in both Russia and the United States to resume the tests. It was certain that the first power to break the ban would come in for a propaganda lambasting. We could, therefore, expect the Americans to derive maximum political value from Khrushchev’s bangs, and the Russians to do their best to play the thing down. For that is typical of the cynicism with which capitalisms propagandists regard such matters of life and death.

At the end of it all, when the bombs have exploded and the propaganda points made, we are back where we started. Only perhaps a little more radioactive than before.

British Guiana

It is not yet ten years ago that Dr. Cheddi Jagan came out on top in the elections in British Guiana, to set the old ladies in the Colonial Office looking under their desks for Red bogymen.

Now restored to respectability and back in power with an absolute majority. Dr. Jagan is doing his best to show that they had nothing to fear. One of his big worries is to attract capital to British Guiana. His government will accept this from anywhere—Britain, the United States, Russia; even Cuba is lined up as a potential source of investment.

But Dr. Jagan knows that some capital would be scared off if he went ahead with what he once professed as his principles of wholesale nationalisation. So he is soft-pedalling on the issue although, like most newly independent states, British Guiana has its eyes upon the foreign interests in her mineral wealth.

This sets the Doctor a pretty dilemma. A false step one way and he could become a second Castro. A false step the other and he will be dubbed a lackey of Western imperialism. When the moment of decision comes for British Guiana, we may depend that there will be no lack of wordy journalists to spill their particular brand of beans.

But there will be a shortage of people to point out that all the time the Guianese workers are cutting the sugar and mining the bauxite and the rest and still, as ever, getting precious little out of it.

Labour Conference

This month, barring landslide, earthquake and the end of the world, Mr. Gaitskell will climb into the ring at Blackpool to disprove the already disproven theory that they never come back.

Last year, it was the pre-conference decisions from the unions which foretold that the Labour Party would go unilateralist. Now, enough unions have changed their minds to make it seem certain that Mr. Cousins will be left alone to uphold the cause of C.N.D. and that Mr. Gaitskell will be champion once more.

Underlying the Labour Party debate on unilateralism is one of the facts of capitalist life, which will persist however much the bomb-banners try to ignore it. In past debates on the issue the platform has made it quite plain that, whatever decision the delegates might take, a future Labour government would be guided in its actions by the necessities of British capitalism.

This means that the Conference might decide against the bomb—but a Labour government would keep it, perhaps use it. This was the theme of one of Bevan’s last important speeches, to the Conference in 1958. And quite logical too. There has never been a government which acted otherwise, and never will be as long as the working class support capitalism.

So the unilateralists are wasting their time on the Labour Party. Come to think of it they are wasting their time anyway, trying to settle one of capitalism’s grisly problems without trying to get rid of the system itself.

Fair Play for Teachers

How many schoolteachers have spent how much time telling how many classes that an Englishman’s word is his bond, and that the road to happiness is paved with honesty and truthfulness?

Anybody who took this seriously must have been shocked by the recent government decisions to ignore the recommendations of the Civil Service Arbitration Tribunal, to restrict the statutory Wages Councils and virtually to destroy the Burnham Committee. And all this from an upstanding Englishman like Mr. Selwyn Lloyd!

In fact, the teachers are wasting their time if they are pining for fair play, for there is no such thing in the class war. The Ministry of Education, for example, took over the Burnham Committee’s functions because the government decided that the committee was being too generous to the teachers.

This makes no sense if we are looking for fair play. But in terms of the conflict of interest between any employer and his employees, it makes very good sense indeed. Teachers as a whole, like many civil servants and other white collar workers have always denied the existence of the class struggle. But it exists for them just as much as for the miner and the docker.

That is one of the things Mr. Selwyn Lloyd seems to be doing his best to teach them. Let us hope they turn out to be bright, receptive pupils.

The "Crisis" — from Cripps to Selwyn Lloyd (1961)

From the October 1961 issue of the Socialist Standard

The workers, whose wages and jobs are involved, view the latest “crisis" as a serious matter, as also do the employers who are fearful about their falling profits, but in every other respect it has the appearance of a farce, represented almost every other year since the end of the war. The Opposition, forgetting that crises also happened when they were the government, say that the thing itself and Selwyn Lloyd’s methods of handling it are evidence of Tory ineptitude and viciousness. The Tories, embarrassed by their promises that it would not happen again when the people were “set free” from Labour government planning and controls, now find themselves committed to the idea of planning, though this time it is to be by a national economic council, representing government employers and trade unions instead of planning from Whitehall. Except for variations of detail and emphasis there isn't a single original idea in the new Tory policy and no indication that they are any better at smoothing out capitalism than were the Labour government. Most of Selwyn Lloyd's speeches and actions might have come straight from the late Sir Stafford Cripps.

The elements of the problem are fairly simple. The manufacturer, if he is to sell his goods, has to offer them at competitive prices, "as high as the market will bear,” but not so high as to leave the market to cheaper competitors. But he also has to worry about his wage costs. If wages increase too much his profit suffers so he needs something to act as a brake on wage-claims and at present the unemployment brake is missing. As the purpose of capitalism is making profit, what are the employers and the government to do in a situation like this? Fight the unions over all wage claims? But that means bringing factories and transport to a temporary standstill, at enormous cost in the shape of lost production and profits, and with the risk that the government would lose the next election. Two policies that had looked promising for a time were Cripps' appeal to the workers not to claim higher wages, and the policy of raising the price level by currency inflation. If manufacturers know they can count on steadily rising prices for what they sell they do not have to be adamant about wage increases induced by the rising cost of living. But while this is workable inside the country it cannot help the exporter, selling abroad: he cannot put up his prices. Cripps was eventually persuaded to devalue the pound in order to make it cheaper for the foreigner to "buy British"; but in the nature of things this is a remedy that cannot be safely repeated every few years.

The other part of the Cripps plan that has been copied by all his successors is to ask for more output per worker. The idea behind this is that provided all the additional output is sold, it would permit wages to rise without cutting into profit.

Where Cripps Left Off

The present government has carried on from the wage restraint policy of the late Sir Stafford Cripps when he was Chancellor in the post-war Labour government. It was his White Paper on Personal Incomes, Costs and Prices, 1948, which laid down the policy that “there should be no further general increase in the level of personal incomes without at least a corresponding increase in the volume of production.” There should be no increase of income from profits and rent, and rises of wages should only be asked for either when productivity was increased or to attract workers to industries short of labour. In particular he objected to workers in one industry demanding increases to keep up with workers in another industry, and in 1949 when the devaluation of the pound again put up the cost of living he condemned wage increases aimed at keeping up with the rise of prices.

Cripps was helped to some extent by the fact that the T.U.C. endorsed his wage restraint policy and the result was that wage rates were falling behind the increased cost of living from 1947 to 1951. The present government has no hope of getting T.U.C. support for a wage freeze, but it calculated that the T.U.C. would be unable to resist the bait of "planning,” because that has long been one of their demands.

In one respect—the pay of teachers and civil servants—Selwyn Lloyd has been more drastic than was Cripps. When the latter was in control all wage-fixing bodies, including the civil service arbitration tribunal, were urged to take note of government policy on wage-restraint: this time the government has imposed its own, over-riding, “pause” on civil service pay and has cut by several million pounds the recommendations on teachers' pay. (The police have been luckier, their big pay increase was already in operation).

This isn't the first time a government has exercised its power to withhold agreement and thus delay wage increases proposed by wages councils. It was done in 1957 in respect of National Health Service workers, and back in 1948/9 the same delaying tactics were used by the Minister of Labour in the Labour Government. It took nearly a year for the retail food council and the hairdressing council to reach agreement in 1948 on proposed pay increases but the Minister, Mr. Isaacs, referred back certain of the proposals. The councils sent them back to him again almost unaltered and the Minister rejected them again in August, 1949. The T.U.C. reported (1950 Report, p. 167) that after a meeting with the Minister the difficulties were removed, and the increases were put into operation in October, 1949, after nearly a year's hold-up. According to Press reports at the time, the Shop Assistants Union had threatened to embarrass the Labour Government by putting down an emergency resolution for the Trades Union Congress.

The tough talk from the government about the “pause” on wage increases aroused similar tough talk from trade union officials declaring that they would have none of it; that they were not going to be dictated to and that “legitimate” wage claims would go on as usual. The unions are quite right to continue the wage struggle but they are only deceiving themselves if they think that there would be no restriction on wage increases if Selwyn Lloyd had not put it there. Wages are always restricted; basically by the fact that they represent the value of the mental and physical energies the worker sells, and at any given moment by the demand, and the amount of unemployment The employers have to aim at keeping wages down to a level which leaves a surplus for profit. This is capitalism, and it is idle to pretend that it can be made to operate as if its purpose was to provide constantly rising real wages without regard to profit In practice, trade unions are forced to recognise this fact hence their almost invariable practice of having to settle at some figure far less than they claim; railway unions in 1958 claiming 10 per cent. and accepting 3 per cent., and the same unions under the Labour Government claiming 12s. 6d. in 1948 and eventually being put off with a few shillings for the lowest paid only. And anyone who thinks that a future Labour Government would or could run capitalism differently when they get another chance should take note of the declaration by Mr. Harold Wilson that ‘'for a future Labour Government no less than for the Conservatives success or failure in the battle against inflation would depend on the ability to secure an understanding with the unions which would make wage restraint possible" ("Remedies for Inflation.” by Harold Wilson. M.P., with a foreword by Hugh Gaitskell, 1957).

And what if the Unions do not agree? The present government obviously hopes that the imposed standstill on government employees will stiffen the resistance of employers in private industry. They doubtless share the envious eye the economist, Mr. Paul Bareau, casts on de Gaulle’s “strong man" government which was able to secure that “to a modest degree . . .  real wages in France were for a time reduced" (Sunday Telegraph, 3 Sept, 1961). And how much better still it might be for the capitalists if instead of trade unions there could be, as there are in Russia, Yugoslavia and elsewhere, government controlled so-called unions that are in fact little more than agencies for imposing discipline and stimulating production.

The Prospect

While the unions are anxiously watching what the government does, other indicators may turn out to be more important Some of the economists think that if unemployment rose to about 2 per cent. —2½ per cent., the unions’ ability to press for higher wages would be curbed. It is at present about 1¼ per cent. or 300,000, but has been rising. Mr. Samuel Brittan, economic editor of The Observer, has this to say:—

  The Government’s hand will be enormously strengthened in the coming months by a marked change of tread in the labour market which actually began as early as June. Disregarding merely seasonal changes, unemployment has since been creeping up and unfilled vacancies have been declining. There will not of course be large-scale unemployment or anything remotely resembling it but labour should become a good deal easier to obtain in the coming months.

If the present crisis follows the pattern of the others since the war the pressure will last for a few months. Profits which have recently been falling will start to go up again because wage increases win be harder to get. The Chancellor will then announce that we have “turned the comer" and the workers will be invited to rejoice. And so it will go on until the next time.

One final comment on the farcical aspects of the crisis. The unions of government workers and workers in nationalised industries are incensed because, they say, they are singled out for worse treatment than that given to workers in private industry; these are the unions that go on record in favour of nationalisation!

Edgar Hardcastle

News in Review: Wages Battles (1961)

The News in Review column from the November 1961 issue of the Socialist Standard

Wages Battles

The big thing about Selwyn Lloyd’s small Budget was that it threw out a sort of challenge to the trade unions.

And one of the big things about this winter may be that the unions will accept the invitation to do battle.

The engineers have put in their annual pay claim and the railwaymen are certain to follow suit. If these unions get the same sort of treatment as the government has handed out to the teachers and the civil servants, there will surely be some big strikes.

This is what governments have tried to avoid since the war, preferring to inflate the currency rather than meet the unions head on. The Labour government, with its wage freeze, had perhaps the nearest to a strong anti-union policy.

Since then, the Tories have played it cool. But we were promised some changes when Mr. Lloyd went to the Treasury and the wage pause is one of them.

One fact, though, the wage pause will not change. Workers always have a struggle to get by and always have to fight to keep up their living standards.

That will be worth remembering if the wage pause gets a grip, and the usual bunch of muddle-heads mourn the days before Selwyn Lloyd as a time of free prosperity for the working class.

There just isn't any such thing.


Adenauer Again

Dr. Adenauer’s chances of keeping his grip of the West German Chancellorship were not, at one time, rated very highly.

Most observers expected a close result to the recent elections, with the Free Democrats holding the balance of power in a stalemate between Adenauer's C.D.U. and Brandt's Social Democrats.

And the Free Democrat leader, Dr. Erich Mende, was quite firm that, if his party was invited to form a coalition government with the C.D.U., he would assent only if Adenauer gave up being Chancellor.

Now that Dr. Mende has reversed his attitude and is agreeable to serving under Adenauer, there are one or two questions which many Germans must be asking, themselves.

How many of the four million-odd voters who put their cross against a Free Democratic candidate did so precisely because they approved of Mende’s apparent determination to get rid of the aged Adenauer? And are those voters feeling baffled, or annoyed, about this betrayal?

Whether Adenauer, or Erhard, or Brandt, is Chancellor will make no difference to the German working class.

But it should be instructive for them to observe the cynical manoeuvres of their politicians and to reflect that this sort of thing goes on all the time, all over the world.


Nkrumah Strikes

Dr. Nkrumah has made a habit of disappointing some of the well-meaning asses who supported him because they thought that he wanted to set up a democratic state in Ghana.

These people fall so readily and so persistently for any small-time nationalist who breezes along that it is fair to assume they are able to ignore any evidence which points out the error of their ways.

But surely even they were unsettled by Nkrumah's recent arrest of his political opponents, and by the propaganda which accompanied it?

When the Ghana government roped in the fifty politicians, the official statement justified the arrests by referring to “. . . acts of violence, secret meetings . . . strikes, sabotage, lockouts . . . conduct destructive and subversive, against the Constitution and other legal institutions of the State.”

Now this rings a bell. It is just the sort of vague accusations which colonial powers use to excuse the suppression of a rising nationalist movement.

To read it takes us back to the early nineteen-fifties, when Nkrumah was in gaol. The asses were braying, then, for his release, because he was supposed to be leading Ghana to freedom. Are they surprised that he has turned out to be no better than the rulers he replaced?

We know our asses too well. Even if they drop the dictator in Accra, they will soon be taking up the cause of some other Nkrumah of the future.


Labour Conference

What the theme of this year's Labour Party Conference?

Revolution ? Radicalism ? Reform, even?

Well, no—respectability.

Many responsible newspapers have been worried for a long time at Labour's inability to dent the Tories' confidence. None of them want to see the British capitalist class having to rely upon only one party to form their governments for them.

So they were full of concern that Labour should have a dignified conference. They all hoped for the sort of inoffensive, meaningless resolutions which would make the Labour Party appear as a party which any man of good will could vote for.

This is what is needed to make Mr. Gaitskell anything like a reasonable bet for Prime Minister.

The platform at Brighton played exactly as the press had advised and, except for one or two resolutions, the conference as a whole also fell into line.

This is the logical end to the Labour Party road of power conscious, capitalist reform policies. It is the end which Socialists foretold over fifty years ago, when the Labour Party were busily dubbing us Impossibilists.

Perhaps some of the Labour pioneers never thought it would come to this.

Blackpool, 1961, has done its share to show how wrong they were.

Back to Normal (1961)

From the February 1961 issue of the Socialist Standard

At the last two General Elections we heard much about the wonderful affluent conditions in which we were living.

“You’ve never had it so good” was a Mac Wonder phrase much in the air. We have also distinct memories of “doubling our standard of living within twenty-five years”. The air was as, Hamlet said “promise-crammed" but as he himself tartly added “you cannot feed capons so”.

These promises have now come home to roost. All the other old and well-worn phrases and threats have now been dusted and polished and taken out of storage. The air is now full of them, as threatening. For example, Selwyn Lloyd:

   I will simply point out that no one in the world owes us a living and if we don’t earn it by hard work in this field, the standard of living in this country will go down. It’s goodbye to dreams of expansion and social progress. 

Translated this means—“Work harder. Don’t ask for higher wages or else ... ” 

And another pearl from Mr. Lloyd, "The whole emphasis should be on saving labour, or increasing efficiency and on being competitive”. Then as if to sugar the pill—“Far from that being a threat to full employment it is the only way to maintain it ”.

It would be interesting to hear the comments of the recently sacked motor workers (and those put on short time) on that last bit.

The facts of the matter are that in present-day competitive capitalist society goods can be sold only if, in terms of quality and price, they match up to, or improve upon similar or identical products from elsewhere: the ultimate purpose being to provide a profit for the owners. If this purpose of profit-making is threatened, production eases off, and workers are put on short-time or sacked. Of course, you may rest assured that no capitalist politician is ever going to make this plain to you.'

Max Judd